Romania publishes local administration reform draft bill
<p>The Ministry of Development, on August 7, published for consultations the draft bill for local administration reform, part of the second package of reforms, besides the state-owned enterprises (SOE) reform and the special pension reform.</p>

<p>While the SOE reform was left without a coordinator after <a href="https://www.romania-insider.com/romanian-deputy-prime-minister-resignation-after-bribery-scandal-jul-2025" rel="noopener" target="_blank">deputy prime minister Dragos Anastasiu resigned</a>, the special pension reform <a href="https://www.romania-insider.com/csm-opposition-magistrate-reform-jul-2025" rel="noopener" target="_blank">faced fierce opposition</a> from magistrates.</p>

<p>The local administration reform bill follows the general outline provided by minister Czeke Attila previously: higher revenues, lower spending, particularly payroll, smoother functioning of the institutions, better tax collection, and more local autonomy.&nbsp;</p>

<p>Among the main measures included in the draft bill, there are: cutting the number of personal advisors employed and paid from the budget by top public servants by 6,060; downsizing by 20% the recommended staff (minimum, medium and maximum levels) in village halls to city halls and prefectures (government's bodies at county level);&nbsp;improving the coverage of property taxation by identifying all properties and charging 100% supplementary property tax for the properties without a building permit, over a period of five years; and charging a 30% surtax on the driving fines not paid within 3 months and another 30% surtax for the fines not paid within 6 months and lifting the driving rights for those who fail to pay the fine within 3 months.</p>

<p>The recovery of unpaid local taxes will be passed to judicial officers.</p>

<p>The draft bill also includes detailed evaluation procedures for employees in the local public administration to be enforced once the bill is approved as a law and periodically afterwards.</p>

<p>The estimate of the budgetary impact is incomplete and prudent as it seems to include only the savings generated by the lower staff and not the higher revenues that have a lower degree of certainty.</p>

<p>Specifically, the substantiation note published along with the draft bill indicates RON 2.2 billion (EUR 400 million) lower annual expenditures from the general government budget. This accounts for only 0.1% of this year's GDP. In 2025, however, the impact will be proportional to the period of enforcement.&nbsp;</p>

<p>For comparison, the impact of the first package of reforms on the general government budget is estimated at 3.3% of GDP in 2026, according to the Fiscal Council's projection shared by the rating agencies.</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: Gov.ro)</em></p>