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Today, the Riigikogu discussed the partnership between the state and the local governments as a matter of significant national importance. Reports were made by the Minister of Regional Affairs Siim Valmar Kiisler, Professor of Public Policy in the University of Tartu Georg Sootla and Chairman of the Constitutional Committee Väino Linde.

According to Siim-Valmar Kiisler, the partnership of the state and the local governments in certain fields has been legislated already nearly twenty years ago and has been functioning ever since. He referred to the organisation of public transport, construction of local ports and shipping activities, sharing the expenses of general education schools, construction of schools, kindergartens and light traffic roads at the expense of the state, as well as improving the quality of drinking water and the functioning of the health insurance system. “Drawing from regional aid and in cooperation with Enterprise Estonia, it is often the local governments or their non-profit organisations that develop visitors’ centres, centres of excellence and industrial parks. The state supports the creation of Internet connections in local government areas, inhabitants of low density areas are guaranteed electricity and drinking water through cooperation. The state and local governments have yet to coordinate their interests in the issues of wind farms, gunnery practice grounds and many other important objects,” Kiisler said. The partnership between the state and the local governments in ensuring the services and the living environment to the population often functions as a direct relationship between the responsible state and local government officials in a constant, although mostly invisible way. Kiisler noted that the bulk of the budget of local governments – 42 % – is spent on kindergartens and general education schools; the second most amount is accorded to public services – roads, streets and transport – 20%. The third place is held by recreation and culture, the fourth by social protection and health, and the fifth by environmental protection, mainly in the form of waste management. “These are the main fields where the cooperation of the state and the local governments must run smoothly,” the Minister stressed. He attached great importance to intensifying national level regional cooperation in order to guarantee the regions’ capacity for cooperation abroad, drawing attention to the Auditor General’s assessment of the administrative and legal capacity of small local governments, i.e. most local governments in Estonia.
A special form of cooperation to get a mention from the Minister was the annual negotiation on the amount of the budgetary compensation fund in the draft state budget, held between the government delegation and the cooperative council of local governments.
“The key issue of the upcoming years is the creation of new jobs,” Kiisler emphasised, adding that this area has been largely ignored by local governments. To quote Kiisler, “In order to make decisions that greatly affect entrepreneurship, local governments must cooperate today within workforce pool areas, which often means the county level. Until administrative reform is carried out and while the local governments lack a real incentive for broader regional cooperation, most concentrate on schools and kindergartens and only bigger cities tend to come in contact with entrepreneurial development. I envision strong urban regions as partners of the state, because they can provide partnership to companies, thus bringing new jobs and also new people to the region.” Kiisler said that the standards of local services that the local governments often expect from the state also mean considerable restriction of the right to make decisions locally, which, however, incites opposition. This means that a compromise must be found between freedom to make decisions, and civil rights. In the opinion of the Minister of Regional Affairs, wider cooperation should be built on democratic and efficient local governments who have sufficient means to make decisions that concern the locals and who are able to offer partnership to companies and the state in shaping the regional educational space and business environment as well as in creating new jobs. “The partnership between the state and local governments should consist in creating more equal opportunities for everyone all over Estonia, with the most attention accorded to the actual problems of the people and families,” Kiisler said.
 
Professor Georg Sootla sees serious tensions in the current system, which could inhibit Estonia’s strategic development. “By 2010, completely new challenges have appeared in Europe and the local government systems that served as models for us have been or are being reformed. This is why we need a new local government policy; we need to jump off the transition train and establish a new policy that echoes the logics of a stable society and corresponds to new challenges in Europe,” Soodla said. He named fiscal recession and demographic crisis as the main challenges which require a different interpretation of the relations and autonomy of all levels. Globalisation and europeanisation also need a fresh approach, as does the birth of a new super-mobile Internet generation who is practically living apart from the territory-bound community, as well as the development of European macro-regions and their inclusion in the implementation of the Baltic Sea regional strategy. “Answers to these challenges should form the central guidelines of the future local government policy, more specifically the partnership policy of the state and local governments. They must first be acknowledged then applied for solving practical problems,” Soodla emphasised. The Professor sees fiscal centralisation as well as centralisation of decision making as the main obstacles in the relations between the central and local governments.
Sootla proposed shaping a comprehensive Estonian administrative concept by the 100th anniversary of the Republic of Estonia in 2018. He also recommended forming a public administration committee in the Riigikogu, supported by a permanent think tank on local government and regional development which would unite researchers, politicians, high level state officials and local government officials. “This step should be supported by transferring the coordination of local government policy under the authority of the Ministry of Finance and by shaping a strong union of local governments, as well as by probably the simplest political solution possible today – setting up of service areas and developing joint services areas,” Soodla affirms.
 
The Chairman of the Constitutional Committee Väino Linde admitted that there were some conflicts between the state and local governments. Linde agreed that a new local government organisation act should be elaborated, where the current tasks and goals of local governments could be laid out, with full attention given to the Internet era. Linde also thought that the Riigikogu could form a committee for local governments to turn to in case of problems or if they wished to voice their opinions. It is also worth considering to transfer the Bureau of the Minister of Regional Affairs from the Ministry of Internal Affairs to the Ministry of Finance.
 
The presentation of this item on the agenda included speeches on behalf of the factions made by Kaia Iva, Arvo Sarapuu, Jaan Õunapuu, Peep Aru, Aleksei Lotman and the Member of the Riigikogu Jaanus Marrandi.
 
 
On the motion of the Finance Committee, the Act on Amendments to the Local Taxes Act (774 SE), initiated by the Estonian Reform Party faction and the Pro Patria and Res Publica Faction, was adopted with 45 votes in favour. The amendment eliminates the sales tax and the boat tax from the list of taxes applied by local governments. The Act enters into force on 1 January 2012. 41 members of the Riigikogu voted against the Act and 4 members of the Riigikogu abstained.
 
 
The Riigikogu Press Service
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