Fushë-Arrëz, Klos, Përrenjas, Belsh, Këlcyrë, Selenicë, Libohovë and eight other municipalities will cease operating as separate units of local government with the entry into force of the new territorial map. However, changing administrative boundaries does not mean their funds will be lost. On the contrary, the money planned for these units will be transferred to the municipalities that will absorb them.
Finance Minister Petrit Malaj said the transfer of funds will be carried out through a normative act, after the new municipalities are constituted, which is expected to happen in September 2027. “The constitution of the new municipalities will take place in September, and for the last quarter of the year, through a normative act, the funds allocated to the municipalities that will be absorbed will be transferred to the municipalities absorbing them,” Malaj stated.
Thus, 2027 will be the last year in which the 15 municipalities slated for merger will be financed as separate units from the state budget. For the last three months of the year, the administration of funds will pass to the successor municipalities. The territorial change will also be accompanied by a review of how money for local government is distributed. The Ministry of Finance is expected to intervene in the formula for the unconditional transfer, taking into account the new number of municipalities and the aim of giving them greater financial autonomy.
“Over the coming year we will also review the distribution formula for the unconditional grants we give to municipalities, since it will need to be revised simply because we will have a revised number, but on the other hand we will also need to start thinking about greater autonomy for local government,” the minister said.
For 2027, local government expenditure is planned at 114 billion lek. Of this, 56 billion lek is expected to come from the state budget. Currently, the allocation of the unconditional transfer is based on several criteria, including population size, population density and number of pupils. The calculation also takes into account each municipality’s fiscal capacity to generate revenue from its own sources. With the change from 61 to 46 municipalities, these criteria will need to be adapted to the new administrative reality. It remains to be seen how the new formula will be built and what weight each indicator will have in distributing funds among the reorganized municipalities.