On Wednesday, 22 January, Riga City Councillors approved the capital's budget for 2025, with the key priorities being infrastructure renovation and development, civil defence, broader support for families and children, and the development of housing and the historic centre.
"Financial situation in Riga is stable, while we have planned the 2025 budget in a fiscally very responsible way, keeping a close eye on the city's spendings resulting in maximum benefit to the residents of Riga, development of the city, making it dynamic and interesting for both our residents and tourists. The 2025 budget of Riga is a budget for the development of the city and the security of its residents. This year, we will continue renovation and repair works of streets, bridges, schools, kindergartens, social care institutions, parks and other city infrastructure to the same extent as we started last year - the investment plan has been tripled in the last three years and will reach almost €300 million this year, most of which is financing attracted from EU funds, says Vilnis Ķirsis, Chairman of the Riga City Council. "The year of 2024 proved that organising various events is a way to both get the residents of Riga on the streets and see visitors from other Latvian cities and tourists to attend the events in Riga. We will continue our strategy of an active Riga, therefore, the 2025 budget includes special programmes for entrepreneurs who operate or want to operate in the historic centre of Riga - the municipality will offer co-financing for both organising events and starting a business on the ground floors of buildings, furthermore, the Riga Construction Board will have to provide these entrepreneurs with the so-called green corridor, or fast harmonisation of permits without unnecessary and burdensome bureaucracy", the Mayor continues.
Although inflationary pressures have eased, changes in the costs of services in previous periods, wage increases in a number of sectors continue to have an impact and force the municipality to direct its expenditure primarily towards the affordability of services. The negative impact of the tax reform on municipal budgets is offset by the redistribution of personal income tax (PIT) in favour of municipalities, which allows them to be optimistic about the future and cautiously develop new services for families and children. Whereas, falling interest rates make it possible to plan for increased borrowing for infrastructure development, the municipality's financial experts conclude.
Budget revenue
Riga City Council has planned revenues of EUR 1 billion 470 million in this year's budget, representing EUR 50 million over the amount planned last year. The revenue increase is mainly determined by the planned increase in personal income tax revenue and special subsidy of the State budget based on the macroeconomic forecasts of the Ministry of Finance.
Budget expenditure
Total budget expenditure is planned to reach EUR 1 billion 694 million, representing EUR 110 million over the amount of last year. Increase in expenditure dynamics exceeding the increase in revenue is related to the implementation of two major infrastructure projects - the Kundziņsala flyover and the further phases of the Southern Bridge - for the construction of which a loan is planned in agreement with the Government. Riga's contribution to the Local Government Equalization Fund will reach €138 million in 2025.
Remuneration
The amount of Riga's expenditure on remuneration is mainly affected by external laws and regulations - increase in the minimum wage to EUR 740 and the 2.6% limit on the increase of the wage bill set in the laws and regulations, which Riga City Council will also comply with, however, with exceptions for the remuneration of Riga Municipal Police officers and the remuneration of caregivers at the Riga Children, Youth and Family Support Centre, according to individual and justified decisions of the City Council. For the second year in a row, the Riga City Council sets limits on pay increases for elected officials.
Investment and traffic
In 2025, Riga City Council plans its historically largest investment of €288 million in education, transport and urban regeneration. Cooperation with the Ministry of Finance and the Ministry of Transport is of great importance, where the necessary funding is available for the construction of the Kundziņsala flyover and the next phases of the Southern Bridge. This year, reconstruction of Mūkusalas Street and the embankment, as well as the Zemitāna flyover, are scheduled for completion. Whereas, around €4.4 million has been planned for the second phase of the renovation of the Victory Park in 2025.
Security
"Spending on the security of our residents and civil defence is a priority in the Riga budget, equal to investment - we will invest up to six times more in this area compared to last year. The budget includes foreseen funding for arrangement of 30 shelters, we will continue investing in cyber security, and provide a 10% salary increase for Riga Municipal Police officers", says Mayor V. Ķirsis.
In cooperation with structural units of the government, internal security has been defined as one of the priorities and a financial solution has been found for the renovation of the Municipal Police centre at Lēdurgas Street, as well as salaries of police officers will be increased in 2025. Riga City Council will continue financing the activities of the Ukrainian Support Centre. The city council will also work on strengthening cyber security by investing €1 million.
Social field
Compared to the 2024 budget, an additional EUR 14 million has been allocated this year for various expenditure in the social field, bringing the total budget allocated for social field to EUR 142.3 million, along with the increase in share of such expenditure in the total spending.
In 2025, the focus will be on home care and social care centre services to ensure the quickest possible access to this service.
Support for families and children has been significantly expanded, with additional funding of €3.9 million for various support services.
Spending of €34.7 million is earmarked for social benefits, with increases planned for all benefits, and disbursing financial support for politically repressed persons twice a year.
Significant investments are planned in the renovation of the municipality's social care centres and in the improvement of the municipal property at 35 Burtnieku Street, which is an important social services centre.
Environment and housing
Activities for the improvement of the urban environment include the arrangement of cycling infrastructure in neighbourhoods with technical traffic organisation equipment, renovation of playgrounds and recreation areas in neighbourhoods for €1.6 million.
In 2025, spending of €2.9 million is planned for the arrangement of the memorial dedicated to the victims of the Zolitūde tragedy.
This year, rebuilding of three social houses (150 flats) and refurbishment of 200 flats worth €24 million are planned. New home environment programmes for educators and professionals are also planned.
Education
Attracting and supporting educators will be a priority for the Riga City Council in 2025, as it was last year. Additional €2.5 million is earmarked for improving the learning environment. The city council will continue the development of the STEAM ecosystem and the ongoing STEAM synergy project in the institutions of interest education.
The capital has decided to increase the co-financing for parents in private pre-school education institutions: from €403.58 to €450.12 for children up to the age of four, and from €288.11 to €297.63 for children at the age of mandatory preparation.
There are plans to invest heavily in the development of school and pre-school infrastructure, in the renovation of the National Sports Arena, in the energy efficiency of buildings of school and pre-school institutions, and in the improvement of territories, as well as in the construction of new sports grounds near schools.
Culture, sports and youth
Funding for culture and sports sector is being increased, with a particular focus on implementation of cultural events in the urban environment and sports support programmes for children and young people. Funding for urban design has also been increased.
This year will be marked by the XIII Latvian School Youth Song and Dance Festival, which is why €1 million has been earmarked for participation in the festival. Camps for children and young people, including children with functional disabilities, will be organised also this year. At the end of this year, as last year, the municipality will provide a public ice rink, for the operation of which €0.2 million has been earmarked.
Information was prepared by: Sindija Grāvere, Acting Head of the External Communications Department of Riga City Council Communication Administration, e-mail: sindija.gravere@riga.lv.
