The mayor wanted information on hazardous materials before the industrial park and multi-million dollar tax revenues were withdrawn from the city.

The government declared the opposition-led Göd a special economic zone, and with it directed the trade tax paid by the Samsung factory, a third of the city’s revenue, to the Pides county municipality, with a majority of Fidesz. The case of a local industrial park could be an example of how a declared emergency due to a coronavirus epidemic could also “solve” problems that have caused concern to the government in recent months.

The history of the Samsung factory in Göd began in the early 2000s, when the plant was still producing picture tubes for televisions. With that, they closed in 2014, but the site did not sell, and in 2018 they started producing electric car batteries as a test operation. The investment involved the expansion of land and sites, which at the same time received serious government support and sparked strong local protests. Gödi residents spoke

• deforestation creating a new building area,
• The emergence of an army of guest workers in the small town of 20,000 inhabitants,
• and increased noise exposure, dust concentrations and fear of future emissions have also fueled resistance.

Several public hearings were held in the city, but dissatisfied and anxious residents were not much reassured. At such an event in 2018, the then mayor of Gides Fidesz opened his hand to civil proposals, József Markó, and stated that not much could be done against the project, “because the decision was made.” According to the Fidesz leader, the municipality can only have an executive role. At the time, expansion was already a priority investment thanks to the government, which also means an accelerated licensing process.

But the attitude of the municipal assistant changed last fall, Markó and the former majority of Fidesz were replaced in the municipal elections, the new mayor is instant Csaba Balogh who took a completely different attitude to expand the Samsung factory, without questioning its benefits to the city. At a public hearing in January, for example, sitting next to representatives of the factory, he said: “I am on the side of the residents.” Which means, the mayor explained at the request of 24.hu, that he wanted to bring control and transparency to the investment.

The roads inside and outside the industrial area are (until now) owned by the municipalities, which meant a negotiating position.

According to our idea, we would have conditioned the use of roads to the fact that the factory provided us with data on the use of substances dangerous for the environment and their quantities. This could have created a reassuring monitoring system for residents, but that provision of data, as the roads also went to the Pest County Township, will hardly be realized now.

Balogh said.

The mayor also mentions another case that could have led to government intervention: “In view of the epidemic situation, disaster management suggested to the municipality that we conduct the public hearing online, but I opposed this. You cannot replace a live post with a chat question. They, on the other hand, did not accept my argument, and this circle appears to be closed even without a public hearing. So we go to court. And because of the paths and the tax revenue that we have taken, we go to the Constitutional Court. ”

Strategic issues

From the Orbán government’s point of view, the Samsung plant in Göd is indeed a matter of strategic importance. It was announced a few days before the municipal elections. Péter Szijjártó in the presence of the Minister of Foreign Affairs, that Samsung SDI will expand its battery plant by 390 billion HUF, which will create 1,200 new jobs. The mayor of Fidesz was also present in the announcement, but this did not save József Markó’s chair either. In addition, Korean investment was a spectacular result of the opening of the East government, the Foreign Minister mentioned at the press conference that Germany has always been the main investor in Hungary in the last five years, but that by 2019 Korea South has become the largest investor. Far Eastern companies spun the Hungarian economy by more than HUF 400 trillion.

It was later revealed that the Hungarian state would provide 108 million euros in support of the expansion, which, at the then exchange rate, would be approximately 35 billion forints. Therefore, the European Commission launched an investigation last fall, questioning whether the aid met EU standards.

The current mayor of Göd told our newspaper that the tax deduction will result in a loss of 1.2 billion HUF this year alone, representing a significant but 2.8 billion reserve of land sold to the factory.

“We can resolve this year from this, and we hope that the order will be restored by the end of the year, we also trust the decision of the Constitutional Court,” he added.

Until now, only business tax reform has been on the agenda, the novelty is that the government is unscrewing the right to collect local taxes from the hands of a municipality. Last November, the government announced a plan adapted to big cities, according to which the business tax should be used mainly to finance local public transport. Many have translated this into a state that would keep the capital and several rural metropolises at bay, as the business tax is a determining factor in their budgets. This would even cost Fidesz-led citadels like Győr, the country’s second-largest city with a HUF business tax revenue of 21-23 billion a year, more than half of which comes from the Audit.

Then in February of this year Mihály Varga The Minister of Finance proposed another idea: to grow the economy, the business tax base will be reduced so that depreciation can be canceled and R&D deductible costs can be increased. Regarding the weight of the idea, the business tax It is the largest and most predictable source of income in settlements, in 2018, 711.2 billion HUF flowed into local coffers. In the declared emergency situation due to the coronavirus epidemic, the government decided to redirect the car tax to the central budget, which cut local governments by HUF 34 billion.

But there was an intention not only to curb taxes collected locally, but also to centralize the placement of foreign investment. In late 2015, the Orbán government established the state-owned NIPÜF Industrial National Park Operator & Development Ltd., whose task is to establish a national network of industrial parks. The company successively purchased development areas from Páty to Miskolc to transform them from successive injections of state capital into industrial parks, populate them with investors, and even build the plant for them.

Therefore, government measures have already been taken to curb local governments and sweep away the benefits of investment, but with the introduction of the special economic zone, the two can be solved at once.

In a government decree, you can declare a special economic zone as a site for the implementation of a new investment or expansion and its surroundings in order to avoid the massive loss of jobs or the creation of new ones. The measure taken in the shadow of the coronavirus is possible in the case of investments with a total cost of more than HUF 100 billion, which stand out from the point of view of the national economy. The right to collect and collect business taxes will transfer to the county government, but the municipality may also waive other local tax revenues from the area.

The money raised may be redistributed by the county government, but you will certainly receive less of the settlement than before. The tax can be used to support development and operation of settlements located in the county, primarily, but not exclusively, affected by the investment, and 5 percent may also go to the operating costs of the county’s autonomous government.

Featured

There are many notable investments in the national economy, the Hungarian orange had more than two thousand already in 2018, and since then the circle has only expanded. The originally invented category for large investments initially included EU-backed projects and investments with at least HUF 5 billion or at least 1,000 new jobs implemented with budget support. Later, anything that was meant to speed up licensing could be included in priority projects, like stadiums, but also in the planned renovation of the HUF 300 million uphill school.

However, there are not many projects above the 100 billion threshold set in current regulation, usually large automotive or related investments.

• The Mol Petrolkémia Zrt. Polyol plant, which is being built in Tiszaújváros, stands out from the line of ongoing developments. The government will contribute 131 million euros to the investment, which will amount to 1,200 million euros (approximately 420,000 million HUF). One of the largest chemical plants in the region is being built, making Mol a producer of plastic raw materials as a great power. There were no reports of flashes between the municipality and Mol over the Gödi inn, although the mayor was also not pro-government here. György Fülöp He won last fall with the support of the Tiszaújváros Local Patriots and the MSZP, easily defeating the Fidesz starter. Last June, at the start of construction of the container city, the local government told our newspaper that more than HUF 4 billion of the business tax had been received in 2018, and that they expect significant revenue from the polyol plant.
• The expansion of the Mercedes-Benz plant in Kecskemét is similar in size to the Mol development, although in the run-up to the recession, the German automaker announced last May that it would temporarily suspend the expansion and reschedule the project. The same is true for the Mercedes factory, which is true for Samsung in Göd: it affects much of the county, the value of the investment far exceeds HUF 100 billion, and there are 2,500 new jobs. However, from a political point of view, it would be spicy if the car factory were also located in a special economic zone, since Kecskemét is run by the mayor of Fidesz, a member of the spacious Matolcsy family. Klaudia Szakereyné Pataki.
• Also a city led by Fidesz, Debrecen took over the construction of the billion-euro factory for the other major German car company, BMW and Market Zrt. He has recently started preparing the area. It is true that the industrial area of ​​more than 400 hectares has been specially treated until now, but it did not seem that the state would like to take it, on the contrary, the budget of the Ministry of Innovation included 23,500 million HUF to “carry out the necessary municipal tasks to improve the infrastructure connection of the area “and more than HUF 10 billion for public service developments.
• Last year, Germany’s FAKT AG also announced a € 1 billion investment in building the most modern horticultural production, processing and logistics center in Central Europe on the western border, on the border of Hegyeshalom and Bezenye, in the area that once dreamed of being a casino city. It was about creating 5,000 new jobs and, as you know, the representative of the Fidesz district, István Nagy The Minister of Agriculture is at the center of the project’s fate. The two municipalities involved are independently administered
• SK Innovation of South Korea has found its estimate in Hungary and is establishing its second European plant in Komárom. This time, with an investment of 239 billion HUF, Fidesz promised to create a thousand jobs Attila Molnár city ​​taken The company will supply its European trading partners from here, at full capacity, they can equip up to 250 thousand hybrid and electric cars with batteries per year, and production at the plant can start at the end of 2021-2022.
• Last year, the National Investment Agency awarded the € 407 million investment from Japan’s Toray Industries Hungary as the year’s biggest new investment. Nyergesújfalu was chosen by the company to build its first European separating film production unit, which is the soul of the lithium battery in electric cars. The investment value exceeds HUF 100 billion, but the location of the project, which promises 188 new jobs, is also an agreement managed by Fidesz.

Opposition fears

According to this list, big opposition-led cities don’t have to worry about Göd’s fate just yet, but the concern, we’ve discovered, has been significant since the government decree was issued on Friday. In fact, the Cabinet not only passed legislation on the takeover of the Göd Industrial Park (as is well known, in emergency situations, government decrees can even override laws), but also created the opportunity for other decisions Similar. From here, for example, lowering the HUF 100 billion threshold, and thus excluding other local governments from local developments and tax revenue, would be a much smaller leap.

In legal terms, in addition to the constitutionality of depriving a local government of its rights, the privileged role of county governments raises serious concerns.

Since the nationalization of educational and health care institutions, county assemblies have had little substantive competition, but their legitimacy in terms of agreements is indirect at best. As it is, since while the citizens of Göd at least voted for the composition of the county assembly, this is not true for those living in cities with county status, they could only have something to say in the formation of the council of the city.

Thus, for example, if the government were to consider an investment in Szeged as one whose “protection” requires a special economic zone, the county autonomous government, whose members could not even vote for those living in Szeged, would be in a key position in place of administration of the majority of the opposition in the city. And while in last year’s municipal elections, the opposition gained control in ten smaller cities (and like Göd) in many smaller settlements, with Fidesz holding the majority in the 19 county assemblies.

Featured Image: MTI / Márton Mónus