The salary budget "explodes" in the election year, Municipalities spent 45.6% on salaries

Municipalities continue to spend more on salaries and personnel, with some of them appearing to have further inflated their staffing levels in 2025, which was also an election year.

According to Finance figures, local government expenditures reached 87.8 billion lek, or 17.9% more compared to the previous year. This means 13.4 billion lek more spent by the country's 61 municipalities compared to 2024.

The largest share of the local budget is held by expenses for salaries and insurance, which account for 45.6% of the total. This item remains the largest part of municipal expenses and shows that a significant portion of local funds is used to maintain the administration and public service structures.

Operating expenses accounted for 25.3% of total expenses in 2025, or about 4.1 percentage points compared to the previous year.

Local investments, which have the most direct impact on improving infrastructure and the quality of life of citizens, accounted for only 21.5% of total local government expenditures.

In value, local government investments have increased by about 3.4 billion lekë, mainly influenced by Tirana.

Compared to 2024, the weight of "Economic Affairs" has increased from 20% to 23%, making this function the largest item of local expenditures for 2025. In annual terms, expenditures for this function have increased by 44%, marking one of the strongest increases among the main functions of local government.

The second function with the largest share is "General public services", which account for about 20% of total local expenditures in 2025. A year ago, this function accounted for 21% of the total, but despite the slight decrease in share, expenditures in value have increased by 18% compared to 2024.

Education remains one of the three main items of the local budget. In 2025, this function accounted for 19% of total expenditures, the same weight as in 2024. In annual terms, expenditures on education have increased by 22%, reflecting higher support for one of the most important functions of local government.

A significant portion of spending has also gone to housing and community amenities. This function accounted for 15% of total local spending in 2025, the same weight as the previous year. Compared to 2024, spending on this item has increased by 21%.

Environmental protection accounted for 9% of local spending in 2025, down from 10% the year before. However, in value terms, spending on this function increased by 8%, indicating that the decline in share is more related to the faster growth of other local budget items.

In terms of funding sources, local government expenditures in 2025 were mainly covered by own revenues and transfers from the central budget. Own revenues financed 52% of local expenditures, while transfers from the central budget covered 47%.

For the first time, the financing structure also includes unplanned revenues, or revenues outside the limit, which have covered about 1% of local expenditures. This indicator shows a slight change in the financing structure, but at the same time confirms that local budgets still remain closely linked to central transfers. /ekofin.al