What Requirements Does the Estonian Constitution Set on Granting Financial Resources to Municipalities?
The article is inspired by the Supreme Court decision of 16 March 2010 concerning the supplementary state budget of 2009 (available in English: http://www.nc.ee/?id=1122).
The Grand Chamber of the Court unanimously declared the unconstitutionality of the failure to adopt such legislation, which 1) would stipulate which obligations imposed on local authorities by law are of a local character and which obligations are of a national character, and 2) would distinguish between the funds allocated to local authorities for deciding on and organising local issues and the funds allocated for performance of national obligations, and would provide for funding of the national obligations imposed on local authorities by law out of the state budget.
This article is the first to analyse how the distinctions between local and national obligations should be made and how the financing should be organized according to the views of the Court. The steps taken towards execution of this decision by the state authorities in 2010/2011 have not been sufficient according to the author. The main conclusion is that execution of this decision demands a comprehensive reform of the obligations of municipalities. It can be referred to as the long-awaited administrative reform, but it does not require redrafting of municipal borders.