Published: November 27 2023
The municipality of Budapest is facing financial controversy as the state treasury has deducted amounts from its coffers despite a court order instructing them not to. This has led to tensions between the Budapest administration and the central government, with the mayor calling for the resignation of the finance minister.
Disputed Deductions from the State Treasury
The Budapest municipality has raised charges against the central government's solidarity contribution, claiming that the state treasury has unlawfully deducted funds from the city's coffers. Despite a court order prohibiting collection, the treasury has continued to make deductions, prompting the municipality to seek legal protection and demand redress for the amount deducted.
Actions by the State Treasury
Initially, the state treasury complied with the court decision and refrained from deducting funds from the municipality for two months. However, they recently resumed deducting net amounts from the city's coffers. The treasury argues that there are no legal obstacles to collecting the contribution and asserts that everyone must obey the law and pay the tax, including the capital city.
Legal Protection and Court Proceedings
The metropolitan court initially provided legal protection for the municipality, temporarily prohibiting the treasury from submitting a collection order against them. However, the metropolitan appeals court notified the treasury of its order concluding second-instance proceedings, thereby obliging the first-instance court to conduct the proceedings. As a result, the temporary measure ensuring immediate legal protection ceased to be in effect.
Mayor's Response and Resignation Demand
In response to the disputed deductions and ongoing controversy, Budapest Mayor Gergely Karácsony has criticized the Orbán government and called for the resignation of Finance Minister Mihály Varga. The mayor argues that the actions of the state treasury, including debt collection before the court process was concluded, demonstrate hostility towards the municipality.
Questions & Answers
Why is the Budapest municipality complaining about the state treasury? The Budapest municipality is complaining because the state treasury has been deducting amounts from the city's coffers in connection with the central government's solidarity contribution, even though a court has ordered them not to.
What is the Budapest administration seeking in terms of redress? The Budapest administration is seeking redress in the case of legal protection placed on 5.6 billion forints (EUR 14.7m).
What did the state treasury say in response to the complaint? The state treasury stated that there were no legal obstacles to the collection of the contribution.
What legal protection did the metropolitan court provide to the municipality? The metropolitan court provided immediate legal protection by temporarily prohibiting the treasury from submitting a collection order against the municipality.
When did the temporary measure ensuring immediate legal protection cease? The temporary measure ensuring immediate legal protection ceased on October 17, when the metropolitan appeals court notified the treasury of its order concluding second-instance proceedings and obliging the first-instance court to conduct the proceedings.
What has the mayor of Budapest demanded in response to the debt collection? The mayor of Budapest, Gergely Karácsony, has demanded the resignation of finance minister Mihály Varga.