Government scored half a victory in administrative reform case

Photo: Sille Annuk

Yesterday’s Supreme Court ruling definitely showed the green light for the forced merger of municipalities, but on the other hand this complicates the merger of municipalities based purely on the minimum limit of 5,000 residents.

The ruling certainly does not mean that the municipalities cannot sue the government over the forced merger decision – a number are likely to do so. Thus 26 local governments appealed to the Supreme Court to consider the constitutionality of the Administrative Reform Act on several very principal issues. However, the Supreme Court only ruled that one relatively insignificant article was unconstitutional – it set the top level of merging costs in case of forced merger at 100,000 euros.

The part of the act, which caused the most objections, remained it force – according to that the future municipalities/towns must have at least 5,000 residents with some exceptions. The Supreme Court also ruled that the forced merger itself is constitutional.

“According to the constitution, the Supreme Court has considerable latitude for decision in shaping Estonia’s administrative-territorial organisation,” said Priit Pikamäe, chairman of the Supreme Court. “It also means that the parliament has the sovereignty to decide over the criteria and methods for carrying put the local government reform.”

According to Pikamäe the Riigikogu had already previously made moves for voluntary mergers of municipalities, yet this did not bring along the desired result. “This is why the making of new moves is constitutionally justified”, he added. The parliament could carry out a direct mandatory merger without leaving the municipalities any option for voluntary negotiations. But this option was not selected and, according to Pikamäe, a much milder alternative was preferred – first voluntary joining and only then forced merger. 

The Administrative Reform Act leaves some exceptions allowing the government to waive the forces merger. “The 5,000 resident limit is the premise for starting the procedure of forced merger”, Pikamäe explained. “But this does not mean that the government cannot decide otherwise regarding some particular local governments. The government has to initiate the forced merger procedure, but may also end it so that individual local governments would not have to merge.”

As for the 100,000 euro top limit of merger costs, the Supreme Court’s position is already clear – if the state burdens the local governments with some obligations, it has to meet the resulting cost from its own budget. “If the state sets an obligation, a wallet must come with it,” Pikamäe said. The government claimed that the 100,000 euro top limit had been based on previous experience of local governments merging – the costs had usually remained below that. Yet the argument failed to convince the top court.

However, one of the five members of the constitutional supervisory college expressed his dissenting opinion regarding the ruling and found that it contradicted the constitution. In his opinion the Administrative Reform Act is characterised by extreme superficiality, vagueness and fragmentariness.

If the government initiates forced mergers and court cases begin, several heads of municipalities are already asking, how to organise elections next autumn.

The Supreme Court position is clear on that: until the force merger has not occurred, the municipality exists in its previous limits and the elections will take place as before. “But it cannot be ruled out that new elections will have to be held later in some local government units to be merged,” Pikamäe explained.

Not at all bad

According to barrister Paul Varul, who represents majority of the municipalities going to court over the Administrative Reform Act, the Supreme Court ruling was not at all bad for the applicants.

“While the government stated so far that the minimum level of residents remains at 5,000 and exceptions would be very rare, the Supreme Court now clearly stated that the 5,000 would not be the sole criterion and the government would have a lot of freedom for deliberation,” Varul said.

Thus the towns and municipalities will have a chance to explain to the government why they can retain their administrative capability with less than 5,000 residents. “One has to assess the historical grounds, the impact on living conditions, business environment, education etc.,” Varul explained.

The Supreme Court ruling further shows that in case of forced merger the towns and municipalities can go to court. “The court will then have to judge the merger according to other criteria rather than just the 5,000 residents quota,” Varul said.

Some of the municipalities, which appealed to the Supreme Court, are already negotiating over mergers. “Some are likely to merge with others,” Varul added. “But some have decided to request for an exception from the government”.

Mikhail Korb, Minister for State Administration, said hat allowing exceptions would be a dangerous subject in case of administrative reform.

“I cannot say a single word about it, because every word would be interpreted in a very creative way;” he said. “of course, I am ready to submit to the government the application on behalf of the municipalities, which do not fall too far below the 5,000 inhabitant criterion – if a municipality falls ten or 100 people short, it could be sufficient reason not to insist on precisely 5,000. Then the government will make a considered decision.”

According to Korb, the making of exceptions should now consider the situation of the municipalities more broadly. Thus there will be additional criteria allowing the government to make considered decisions.

Korb added that 66 local governments have by now decided to merge, 100 are in the final stage of negotiations and only 21 municipalities, which are threatened by forced merger, are not negotiating. Neither will these municipalities receive merger support from the government.

Standing tall until the bitter end

The Lüganuse municipality in East Viru county recently withdrew from merge negotiations with the town of Kiviõli and the Sonda municipality. Head of the municipality Viktor Rauam says that they will now take time out for a while in the light of the Supreme Court ruling.

“The ruling contained some interesting aspects – thus they said that the 5,000 residents limit is the ground for the government to initiate forced merger, but not to accomplish it,” Rauam said. “The government has the right to deliberate and I would like to hope that they would not treat all municipalities the same way based on that 5,000 rule.”

If the regional administrative reform committee will recommend Lüganuse to merge with some municipality, they would, according to Rauam, advance their arguments assuring that the municipality can carry on independently with less than 5,000 residents. “We can also cite the consequences of forced merger, which in our opinion would rather deteriorate our situation.”

The Lüganuse municipality has now approximately 3,000 residents. According to Rauam, a large majority of the local governments objecting to the administrative reform would oppose the forced merger all the way. This means that the forced merger decisions made by the government will probably be protested in court. Yet some municipalities, which appealed to the Supreme Court, are still negotiating over merging. They received a clear signal that giving up would not be reasonable – they would lose their merger support as well.

According to Rauam, Lüganuse could not return to the voluntary merger stage anyway, since the deadline has already expired.

“We would not receive any compensation or support anyway and why should we then surrender?” he asked. “We have been standing tall until now and will continue.” Thus Lüganuse is also ready to go to court against the state. The government will initiate the forced merger on February 15, 2017, at the latest.