The Ministry of Interior has completed and submitted to the Union of Municipalities a study illustrating the state funding each new municipality will receive under the local government reform. Following a thorough review, consultations will commence.

According to Brief, the Union of Municipalities awaits additional scenarios from the Ministry. Once these are received, consultation will begin. Post-reform, state funding, effective July 1, 2024, will be based on new criteria and will see an increase. It's important to remember that the number of municipalities will reduce from 30 to 20.

The reform's new criteria will particularly benefit municipalities with lower revenues, who can expect a larger percentage increase in funding compared to their wealthier counterparts.

Until now, municipal funding was calculated as one-third fixed amount and two-thirds based on population. The Ministry is now incorporating additional criteria into these calculations, such as each municipality's revenue and other economic data. This change, as a Ministry of Interior source informed Brief, means a more significant increase in state funding for less affluent municipalities. For example, a coastal municipality with higher revenues will see a smaller percentage increase in funding compared to an inland municipality.

In 2024, municipalities will receive €94.5 million from the state, including €51 million in state funding, €17.5 million for the abolition of the professional tax, and €2.1 million from abolished inter-municipal funds. This figure is based on 50% of the €72 million state funding received in 2023 and the anticipated €117 million post-reform funding. Therefore, in 2024, municipalities will likely receive two installments totaling €94.5 million, with this amount increasing to €117 million in 2025 when the reform is fully implemented.

Specifically, state funding for municipalities will increase by 84% in 2024 compared to 2023, with a total increase of 129% by 2025. Communities will also see increased funding, with a 15% increase in 2024 and a total of 38% by 2025.

It should be noted that displaced municipalities and communities will not see an increase in their state funding.

• Municipalities: From €51 million in 2023 to €94.5 million in 2024 and €117 million from 2025. This equates to an 84% increase from 2023 to 2024 and a total increase of 129% by 2025.

• Communities: From €13.1 million in 2023 to €15.2 million in 2024 and €18 million from 2025. This represents a 15% increase from 2023 to 2024 and a total increase of 38% by 2025.

• Displaced Municipalities and Communities: Funding remains at €4.7 million, the same as in 2023.