The presentation and approval of the Municipal Budget and the Major Planning Options is a step of the utmost importance for the governance of a city.
The last local elections gave Lisbon a new leadership, after several years of PS management. These "New Times" have generated an increased curiosity about the changes that the new executive led by Carlos Moedas (PSD/CDS) may bring to Lisbon, what policies will be continued and what will be new for Lisbon.
This curiosity made us all more expectant about the Municipal Budget (OM) for 2022 - this document, together with another called Major Planning Options (GOP)establishes the main actions planned for the following year (in this case, it is already the current year) and makes forecasts for the three years following that one.
After the election campaign and a program full of promises, the first Budget and GOPs of this executive are the first glimpse of what, concretely, we can expect from Moedas' governance of the city of Lisbon. In this article, we give you an explanation of what these documents are and how they get to the heart of municipal strategy.
What is a Municipal Budget and what are the Great Options of the Plan?
Just as to govern a country you need a State Budget (OE), to govern a city you need a Municipal Budget (OM). At both the national and local scale, the budget is not an isolated document - it appears in the context of Great Options of the Plan (GOPs), another document that serves to plan the city (or the country) in the medium-long term, that is, over a four-year interval.
In the GOPs, the investments that the City Council proposes for the city are defined in a multi-year framework. Generally, GOPs come from the past - they are multi-year plans, so what the executive does each year is an update of priorities, investments and measures. This update is done when the OM for the following year is defined. Basically, the OM is a financial translation of the GOPs; if on one side you define what you want to do, on the other you budget the plan.
The GOPs now presented by the executive are for the period 2022-2026. The document is, of course, more detailed about the year 2022 but drops hints about long-term projects or the evolution of certain investments over time.
"The major options of the plan for 2022-2026 give body to the commitments we have made to the people of Lisbon. And they will be the guiding thread in our social, economic, cultural and political action for the next four years."
- Carlos Moedas on the preliminary note of GOPs 2022-2026
The OM, on the other hand, is a more technical and formal document in relation to the GOPs, and in it are defined the municipality's revenues and the expected expenses for the following year, in this case, 2022 - may not be of as much interest to the average citizen as the GOPs will be.
Who makes the OM and the GOPs?
The responsibility for preparing the Municipal Budget (OM) and the Grandes Opções do Plano (GOPs) lies with the mayor's executive. In detail, the "journey" of the OM and the GOPs is as follows:
- the executive of the Lisbon City Hall elaborates a proposal for OM and the respective GOPs. In theory, the documents are developed by the municipal services with input from all parties represented on the city council, i.e., all councilors with and without portfolio, whether or not they are from the opposition. However, in practice, it ends up being mainly a proposal from the executive team that belongs to the list that won the elections, not least because the discussion with the remaining parties follows later in the process;
- this proposal is usually presented, in its broad outlines, to journalists and the interested public of the city (that's what happened on January 5th). However, at this time, the full documents are not released - they will only be known in full once they have been approved;
- a OM and GOPs proposal is then discussed and voted on in an executive meetingwhere all councilors sit, including those who have no portfolio and those who are in opposition. The opposition can always vote against the OM and the GOPs, and request changes before the documents go to the last step in the Lisbon Municipal Assembly (AML);
- if and when approved at a City Council meeting, the proposal then passes to the AML for final discussion and appreciation. In the case of an approval, the OM and the GOPs can then be executed by the City Council.
The Municipal Budget for 2022 is currently at point 3 of its "journey". There has not yet been a vote, but in the discussion at the City Council meeting that took place last week there was a disagreement from the opposition about some of the OM figures.
What differences are there between an OM and an OE?
There are some more obvious differences between a Municipal Budget and a State Budget. The latter is made by the Government and presented as a bill to the Assembly of the Republic for discussion and voting, in general and in specialty. At the national level, the GOPs are also presented when the State Budget is made.
The Municipal Budget has an intermediate stage: the municipal executive includes opposition parties, so it is necessary to have a first discussion and vote on the OM in a municipal meeting before submitting it to the Municipal Assembly.
Remember that, in the current executive, all the councilors are from the PSD/CDS coalition list that won the last elections - are five councilors plus the president and vice president. In the opposition, the following political forces sit: PS (five councilors), Free (one councilor), PCP (two councilors) and BE (one councilor); there is also one independent councilor (Paula Marques, from the association Citizens For Lisbon). All councilors are part of the Lisbon City Council executive: the councilors with portfolio have "ministerial portfolios", that is, they are responsible for some themes; the councilors without portfolio are part of the "opposition" and can concern themselves with any area of the council's performance.
What are, in fact, budgets?
A Budget, be it a State Budget or a Municipal Budget, indicates where the Government or the City Council intend to spend over the period to which that Budget refers and where they anticipate collecting revenue.
It does not mean that everything that is budgeted, forecasted and planned will be executed, and changes may be made to the OM and the GOPs throughout the year. However, these documents are still of utmost importance for the future of the city's governance.
When is the OM presented? Are there GOPs every year?
The Municipal Budget (OM) must be presented by the executive of the Lisbon City Council to the Municipal Assembly by November 30th of each year. However, in the case of local elections between July 30 and December 15, the OM proposal can be submitted within three months from the date of taking office, from according to the legislation in force.
Now, Carlos Moedas took office on October 18th, so the OM for 2022 would have to be presented in January 2022 at the latest. And yes, every year the OM is accompanied by the GOPs, or rather an update to the GOPs.
What about the municipal companies?
The Municipal Budget relates to the budgets of municipal companiesI mean, the entities that depend on the municipality for their operation and financing. Lisbon has five large municipal companiesEach one with its own budget:
- EMEL - the municipal mobility company
- Carris - the municipal bus operator
- SRU - the municipal public works company
- Gebalis - the municipal housing company
- EGEAC - the municipal company of culture
The budgets of EMEL, Carris, SRU, Gebalis and EGEAC are known as Activity Plans and BudgetA single document that brings together the activities that the company proposes for the following year (which in this case is already the current year) and for the following three years, and the appropriate budgeting of these activities.
The budgets of municipal companies are defined taking into account the guidelines of the municipal executive and follow a process similar to the Municipal Budget: discussion and voting by the executive, then discussion and voting by the AML.
