Increased staff numbers in local government results in a GEL 17 million extra in government spending
The 28 November 2014 amendment to the Local Self-Government Code resulted in an adjustment of the formula to determine the maximum number of employees per self-governing public agency. The previous formula set the total number of local government public servants throughout the whole country at 10,157, while the new one increased it by 2,416 (24%) to a new total of 12,573.
Georgian Dream MP Gia Zhorzholiani sponsored the amendment. He stated in the draft explanatory note that while making this change, the Parliament is to "maintain the current limits of local government employees in almost all municipalities, and only allow for increase in exceptional cases". According to our calculations, the limit on the number of employees was reduced only in Kutaisi and Khelvachauri municipality. On the other hand, limits were increased for all other municipalities (Graph 2).
The explanatory note of the draft law states that the changes will not impose any additional costs on the budget. To determine the approximate increase in costs associated with this change, we took the average monthly salary of a public servant (GEL 738.7 GEL), based on the 2013 data of the National Statistics Office of Georgia, and multiplied it by 2,416. As a result, we estimate this legal amendment to potentially cost GEL 17 million in salaries, for the state budget each year.
Before the enactment of the Local Self-Government Code in July 2014 there was no regulation that would limit the number of employees in local government. This issue was either at the discretion of specific public officials or was decided by municipality councils.
Graph1. Maximum Number of Public Servants by Municipalities
Graph 2. Change in Maximum Number of Public Servants by Municipalities
* Includes both the city and the commune