Lietuviškai
THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA
RULING
ON THE COMPLIANCE OF THE REPUBLIC OF LITHUANIA LAW
ON APPROVING THE FINANCIAL INDICATORS OF THE 2001
STATE BUDGET AND BUDGETS OF LOCAL GOVERNMENTS
(WORDING OF 19 DECEMBER 2000), THE REPUBLIC OF
LITHUANIA LAW ON THE APPROVAL OF INDICATORS
DETERMINING THE AMOUNT AND LEVELLING OF REVENUES
OF LOCAL GOVERNMENTS BUDGETS FOR 2001, 2002 AND
2003 AND ARTICLE 16 OF THE REPUBLIC OF LITHUANIA
LAW ON THE STATE REGULATION OF ECONOMIC RELATIONS
IN AGRICULTURE WITH THE CONSTITUTION OF THE
REPUBLIC OF LITHUANIA
14 January 2002
Vilnius
The Constitutional Court of the Republic of Lithuania,
composed of the Judges of the Constitutional Court Egidijus
Jarašiūnas, Egidijus Kūris, Zigmas Levickis, Augustinas
Normantas, Vladas Pavilonis, Jonas Prapiestis, Vytautas
Sinkevičius, and Teodora Staugaitienė,
with the secretary of the hearing-Daiva Pitrėnaitė,
in the presence of:
the representative of the party concerned-a group of
Seimas members-Vytenis Povilas Andriukaitis, a Seimas member,
pursuant to Paragraph 1 of Article 102 of the Constitution
of the Republic of Lithuania and Paragraph 1 of Article 1 of
the Republic of Lithuania Law on the Constitutional Court, on
18 December 2001 in its public hearing conducted the
investigation of Case No. 25/01 subsequent to the petition of
the petitioner-a group of members of the Seimas of the Republic
of Lithuania-requesting to determine whether the Republic of
Lithuania Law on Approving the Financial Indicators of the 2001
State Budget and Budgets of Local Governments (wording of 19
December 2000), the Republic of Lithuania Law on the Approval
of Indicators Determining the Amount and Levelling of Revenues
of Local Governments Budgets for 2001, 2002 and 2003 in terms
of their enactment procedure were in compliance with Paragraph
1 of Article 69 of the Constitution of the Republic of
Lithuania, while in terms of their content, with Paragraph 3 of
Article 41, Paragraph 1 of Article 69, Paragraph 2 of Article
120, Paragraph 1 of Article 121, Paragraph 1 of Article 127 and
Paragraph 2 of Article 131 of the Constitution of the Republic
of Lithuania.
The Constitutional Court
has established:
I
On 19 December 2000, the Seimas enacted the Republic of
Lithuania Law on Approving the Financial Indicators of the 2001
State Budget and Budgets of Local Governments (Official Gazette
Valstybės žinios, 2000, No. 111-3567). On 21 December 2000, it
enacted the Republic of Lithuania Law on the Approval of
Indicators Determining the Amount and Levelling of Revenues of
Local Governments Budgets for 2001, 2002 and 2003 (Official
Gazette Valstybės žinios, 2001, No. 4-86).
The petitioner-a group of Seimas members-appealed to the
Constitutional Court requesting to determine whether the Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000), the
Law on the Approval of Indicators Determining the Amount and
Levelling of Revenues of Local Governments Budgets for 2001,
2002 and 2003 in terms of their enactment procedure were in
compliance with Paragraph 1 of Article 69 of the Constitution,
while in terms of their content, with Paragraph 3 of Article
41, Paragraph 1 of Article 69, Paragraph 2 of Article 120,
Paragraph 1 of Article 121, Paragraph 1 of Article 127 and
Paragraph 2 of Article 131 of the Constitution.
II
The request of the petitioner is based upon the following
arguments.
1. Paragraph 1 of Article 69 of the Constitution provides
that laws shall be enacted in the Seimas in accordance with the
procedure established by law. Paragraph 2 of Article 131 of the
Constitution stipulates that expenditures established by law
may not be reduced as long as said laws are not amended.
The expenditures of the budget are organically
interrelated, therefore, in case one did not follow the
requirements of the procedure of enactment of the law on
approval of the draft budget, this entire law would be in
conflict with the Constitution.
1.1. In the opinion of the petitioner, in the course of
the enactment of the Law on Approving the Financial Indicators
of the 2001 State Budget and Budgets of Local Governments
(wording of 19 December 2000), one made the following
violations of the provision of Paragraph 2 of Article 131 of
the Constitution that expenditures established by law may not
be reduced as long as said laws are not amended:
1) Article 16 of the Republic of Lithuania Law on the
State Regulation of Economic Relations in Agriculture provides
that not less than 10% of the national budget expenditure as
well as foreign targeted loans and other funds shall be
generally allocated annually for implementing the national
agriculture development programme and the measures of state
regulation of relations in agriculture, for forming state food
product reserves, and for the purposes of land reclamation and
acid soil liming. In the opinion of the petitioner, these
requirements of Article 16 of the Law on the State Regulation
of Economic Relations in Agriculture were not realised in the
Law on Approving the Financial Indicators of the 2001 State
Budget and Budgets of Local Governments (wording of 19 December
2000), since it was provided to allocate LTL 618.7 million for
the purposes of agriculture, forestry, fishing industry and
veterinary medicine in 2001, i.e. 6.3 percent of the national
budget expenditures. The petitioner maintains that thereby the
requirement set in Paragraph 2 of Article 131 of the
Constitution for the procedure of enactment of the law
approving the state draft budget, stipulating that expenditures
established by law may not be reduced as long as said laws are
not amended was violated;
2) Paragraph 5 of Article 7 of the Republic of Lithuania
Law on Land Reclamation provides that the Seimas shall approve
budgetary allocations according to the targeted purpose for the
work to be performed in the sphere of land reclamation, and
that the budgetary allocations for the work to be performed in
the sphere of land reclamation must guarantee a normal
functioning of state-owned land reclamation facilities. The
petitioner points out that the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) approved such a state
budget which separately provided only LTL 40 million for
financing land reclamation. The said sum was not sufficient to
guarantee a normal functioning of state-owned land reclamation
facilities. Thus the requirement established in Paragraph 2 of
Article 131 of the Constitution that expenditures established
by law may not be reduced as long as said laws are not amended
was violated;
3) Article 39 of the Republic of Lithuania Law on Special
Education provides that special education shall be financed
from the state and local governments budgets in accordance with
the procedure established by laws. The petitioner points out
that in order to attain the objectives sought by the law on
special education, for this purpose one must allocate funds
from the national budget. The petitioner maintains that the Law
on Approving the Financial Indicators of the 2001 State Budget
and Budgets of Local Governments (wording of 19 December 2000)
does not provide for funds for the implementation of the Law on
Special Education. Thus the requirement established in
Paragraph 2 of Article 131 of the Constitution that
expenditures established by law may not be reduced as long as
said laws are not amended was violated.
1.2. According to the petitioner, under Paragraph 2 of
Article 6 and Paragraph 5 of Article 11 of the Republic of
Lithuania Law on the Methodology of Determination of Local
Government Budgetary Revenues, local governments may be given a
general subsidy for administration of the national service,
however, the Law on Approving the Financial Indicators of the
2001 State Budget and Budgets of Local Governments (wording of
19 December 2000) gave a special targeted subsidy of LTL 2.714
million for administration of the national service.
2. Article 41 of the Constitution provides that everyone
shall have an equal opportunity to attain higher education
according to their individual abilities and that citizens who
demonstrate suitable academic progress shall be guaranteed
education at state establishments of higher education free of
charge. The petitioner maintains that the state, while
declaring these rights, assumes, alongside, an obligation to
create opportunities to implement them. The petitioner is of
the opinion that the Law on Approving the Financial Indicators
of the 2001 State Budget and Budgets of Local Governments
(wording of 19 December 2000) does not allocate sufficient
funds to ensure the rights of individuals enshrined in
Paragraph 3 of Article 41 of the Constitution. Thus the said
provisions of the Constitution were violated.
3. Article 127 of the Constitution provides that the
budgetary system of the Republic of Lithuania shall consist of
the independent state budget of the Republic of Lithuania and
the independent local governments budgets, Paragraph 1 of
Article 121 thereof provides that local governments shall draft
and approve their own budget, while Article 120 thereof
provides that local governments shall act freely and
independently within the limits of their competence which shall
be established by the Constitution and laws. The Republic of
Lithuania Law on Local Self-Government regulates autonomous and
delegated competence of local governments. Under Paragraph 8 of
Article 23 of the said law, funds for implementation of the
functions of local governments delegated by the state shall be
allotted from the Lithuanian Sate Budget. In the opinion of the
petitioner, the Law on Approving the Financial Indicators of
the 2001 State Budget and Budgets of Local Governments (wording
of 19 December 2000) does not provide for sufficient funds for
the implementation of the local governments functions delegated
by the state, i.e. civil registry, civil defence and
fire-prevention, health activities etc. Thus, according to the
petitioner, the aforementioned requirements of the Constitution
were also violated.
4. Under Article 10 of the Law on the Methodology of
Determination of Local Government Budgetary Revenues, the
Government, having considered together with the Association of
Local Governments of Lithuania the indicators determining the
amount and levelling of revenues of local governments, shall
submit them to the Seimas for their approval. Such indicators
were approved by the Republic of Lithuania Law on the Approval
of Indicators Determining the Amount and Levelling of Revenues
of Local Governments Budgets for 2000, 2001 and 2002, and,
according to Articles 10 and 11 of the Law on the Methodology
of Determination of Local Government Budgetary Revenues, the
indicators ought to have been valid until 2002, however, before
this time period had elapsed, different indicators were
approved for the next three-year period by the Law on the
Approval of Indicators Determining the Amount and Levelling of
Revenues of Local Governments Budgets for 2001, 2002 and 2003.
In the opinion of the petitioner, this conflicts with Articles
10 and 11 of the Law on the Methodology of Determination of
Local Government Budgetary Revenues and with the Constitution.
III
In the course of the preparation of the case for the
Constitutional Court hearing, written explanations were
received from the representative of the party concerned-the
Seimas-A. Brazdilienė, concerning the arguments of the
petitioner.
1. In the opinion of the representative of the party
concerned, the provision of Article 16 of the Law on the State
Regulation of Economic Relations in Agriculture that not less
than 10% of the national budget expenditure as well as foreign
targeted loans and other funds shall be generally allocated
annually for implementing the national agriculture development
programme and the measures of state regulation of relations in
agriculture, for forming state food product reserves, and for
the purposes of land reclamation and acid soil liming is not an
imperative one. It leaves an opportunity for the Seimas, before
it adopts the law on the approval of the financial indicators
of the state budget and budgets of local governments for a
particular year, to assess the financial resources and
undertaken obligations of the state and the concluded
agreements with international financial institutions and to
establish the subsidies for the performance of state functions.
1.1. The Law on Approving the Financial Indicators of the
2001 State Budget and Budgets of Local Governments (wording of
19 December 2000) provided for LTL 618,736 thousand of
subsidies from the state budget for the state function
"Agriculture, forestry and veterinary medicine" (according to
the classification of the revenues and expenditures of the
Republic of Lithuania State Budget and budgets of local
governments approved by Decree No. 352 "On the Approval of the
Classification of the Revenues and Expenditures of the Republic
of Lithuania State Budget and Budgets of Local Governments" of
29 December 2000, issued by the Minister of Finance). Along
with these subsidies, the following was allocated from the
state budget: LTL 91,383 thousand for maintenance of
agricultural schools, LTL 38,482 thousand for various
scientific institutions and educational establishments carrying
out programmes related to agriculture. Thus, on the whole LTL
748,601 thousand were allocated for agriculture from the 2001
state budget, which is 7.8 percent of the national budget
expenditures.
1.2. Besides, according to the representative of the party
concerned, the funds allocated for agriculture from the funds
disposed of by the state must also be recognised as funds
allocated from the state budget. In 2001, it was provided to
allocate LTL 1,399 thousand for agricultural investment
projects from the Privatisation Fund.
1.3. The representative of the party concerned notes that
Article 6 of the Law on Approving the Financial Indicators of
the 2001 State Budget and Budgets of Local Governments (wording
of 19 December 2000) provided for a limit of the liabilities
undertaken by institutions and insurance enterprises, which are
guaranteed by the state. On 7 February 2001, following
Paragraph 2 of Article 8 of the Law on the National Debt and
Article 6 of the Law on Approving the Financial Indicators of
the 2001 State Budget and Budgets of Local Governments (wording
of 19 December 2000), by its Resolution No. 140 "On the Limits
of State Guarantees Provided for the Obligations Undertaken by
the Close Company the Guarantee Fund of Agricultural Loans and
the Close Company, the Insurance Enterprise Lietuvos eksporto
ir importo draudimas", the Government approved the limit of
state guarantees within LTL 230,000 thousand for the
obligations undertaken by the Guarantee Fund of Agricultural
Loans for the banks which gave loans to farmers, farmers'
cooperative partnerships and farmers' associations, and within
LTL 30,000 thousand from the above sum for the obligations
under the Special Accession Programme for Agriculture and Rural
Development (SAPARD).
The representative of the party concerned also points out
that the Council of the European Union approved Regulation No.
1268/1999 of 21 June 1999 on Community support for
pre-accession measures for agriculture and rural development in
the applicant countries of central and eastern Europe in the
pre-accession period. Financial support is provided for the
years 2000-2006 for candidate states within the framework of
SAPARD if the projects are jointly financed also from the
national funds of a respective country. In the course of
financing investment projects, the beneficiary must himself
finance not less than 50 percent of the total investment value
of the project, while the SAPARD and the Government jointly
contribute to no more than 50 percent of the total investment
value of the project (European Union through the SAPARD 75
percent while the Government-25 percent of the financial
support respectively). Lithuania is eligible to LTL 110,181
thousand annually from the European Structural Funds within the
framework of the SAPARD.
1.4. According to A. Brazdilienė, in 2001, LTL 1,090,800
thousand were allocated to agriculture from the state budget,
from funds disposed of by the state and other sources (state
guarantees, SAPARD funds), i.e. 11.31 percent of the national
budget expenditures. Thus, the provision of Article 16 of the
Law on the State Regulation of Economic Relations in
Agriculture was implemented in the Law on Approving the
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000). Alongside, one
may draw a conclusion that Paragraph 2 of Article 131 of the
Constitution was not violated.
2. The representative of the party concerned points out
that the Law on Land Reclamation does not provide for
indicators of financing which might be objectively assessed.
The size of allocations is linked with neither the size of the
national budget expenditures nor relative indicators of the
gross domestic product. Therefore the argument of the
petitioners that in the state budget approved by the Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000)
there are not sufficient funds for financing state-owned land
reclamation facilities to guarantee their normal functioning is
a subjective one.
A. Brazdilienė notes that under the Law on Approving the
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) LTL 40 million
were allocated for land reclamation and soil liming, i.e. the
same sum as in the year 2000. In 2001 all the debts for the
work performed in 2000 were cleared, thus the 2001 allocations
permit the chiefs of counties, who perform the functions of the
owner of state-owned land reclamation facilities, to finance
the repair and reconstruction of the land reclamation
facilities. In the opinion of A. Brazdilienė, since the Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000)
provided for funds for the work to be performed in the sphere
of land reclamation, the provision of Paragraph 5 of Article 7
of the Law on Land Reclamation was not violated. Alongside,
Paragraph 2 of Article 131 of the Constitution was not
violated.
3. The representative of the party concerned maintains
that the state pays much attention to special education. The
Ministry of Education and Science, implementing the programme
of the second stage of the Education Reform, maintains 9
boarding-schools and establishments of child care, in which
children of special needs are educated. These establishments
were allocated LTL 17,493 thousand in 2001. The Educational
Psychological Centre which renders psychological help for
establishments of education and care was allocated LTL 1,680
thousand in 2001. From the funds provided for in the state
budget designated for the Specialists Training Programme, the
Ministry of Education and Science maintains two establishments
of vocational training for pupils of special needs: the said
establishments were allocated LTL 4,297 thousand in 2001. From
the funds of the said programme two more vocational schools are
maintained, in which half of the pupils are of special needs;
the said schools were allocated LTL 4,353 thousand in 2001.
Besides, the counties in their turn allocate LTL 19,700
thousand for implementation of the Law on Special Education. By
these funds special establishments of education and
rehabilitation are maintained. The Council for the Affairs of
the Handicapped, enforcing the Law on Special Education and
other laws, implements the Programme for the Education of the
Handicapped, for the purposes of which LTL 2,717 thousand were
allocated in 2001.
The representative of the party concerned does not agree
with the statement of the petitioner that that the Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000) does
not provide funds for the implementation of the Law on Special
Education. In the opinion of the representative of the party
concerned, while allocating funds for special education in the
Law on Approving the Financial Indicators of the 2001 State
Budget and Budgets of Local Governments (wording of 19 December
2000), Paragraph 2 of Article 131 of the Constitution was not
violated.
4. The representative of the party concerned points out
that on 17 July 2000, the Seimas enacted the Republic of
Lithuania Law on Amending Articles 8, 11, 13, 14, 17, 20, 29,
30, 31, 32, 33, 35 of and Supplementing Chapter II1 to the Law
on the National Service. This law reorganised administration of
the national service and institutions of local self-government
were commissioned to directly administer the national service.
Under Paragraph 2 of Article 154 of the Republic of Lithuania
Law on the National Service, the administering functions of the
national service to organise call-up shall be performed by the
servant appointed by the local government, who will be invested
with appropriate powers.
The representative of the party concerned also points out
that under Paragraph 1 of Article 6 of the Law on the
Methodology of Determination of Local Governments Budgetary
Revenues a state budget general subsidy is allocated to level
the differences within the local governments revenue and
expenditure structures, which are determined by objective
factors independent of local governments activities, while
under Item 3 of Paragraph 2 thereof, special targeted subsidies
may be granted to local governments budgets for implementation
of programmes approved by either the Seimas of the Government.
Paragraph 5 of Article 11 of the said law provides that if the
Seimas or the Government adopts decisions in the course of the
budget year or intends to adopt such decisions for the next
budget year due to which local governments expenditures are
changed, a state budget general subsidy compensation of
relevant size must be allocated to compensate the changes in
the expenditures for the relevant or subsequent year, which is
related either to the change in local governments expenditures
or a corresponding sum taken from the local governments
budgets. The sums of state budget general subsidy
compensations, as well as corresponding sums taken from the
local governments budgets, related to the change in local
governments expenditures, are computed for the local
governments under the formula presented in Article 9 of the
said law. Under this formula, the amount of the funds for
levelling the differences in the structure of local governments
expenditures allocated to local governments is computed, with
consideration of the share of every local government in the
demographic, social and other indicators affecting the
differences in the structure of local governments expenditures.
5. In the opinion of A. Brazdilienė, the statement of the
petitioner that the Law on Approving the Financial Indicators
of the 2001 State Budget and Budgets of Local Governments
(wording of 19 December 2000) does not allocate sufficient
funds to ensure the rights of individuals enshrined in Article
41 of the Constitution is also unreasonable. The content of
such a statement is not clear.
5.1. The Republic of Lithuania Law on Long-term Financing
of Science and Education, wherein relative indicators of
financing science and education are established, contains a
provision that not less than 1.35 percent from the gross
domestic product must be allocated to finance science and
studies, while 6.5 percent from the gross domestic product must
be allocated to education in 2001.
5.2. According to the representative of the party
concerned, LTL 608,533 thousand were allocated to science and
studies (i.e. establishments of higher education and state
institutes of science), LTL 7,452 thousand were allocated to
the Department of Science and Studies which takes part in
determining and implementing the Government policy in the area
of science and studies, LTL 20,668 thousand were allocated for
other scientific research from the state budget in 2001. LTL
20,000 thousand are provided for the allocation from the loans
received in the name of the state for various investment
projects of establishments of higher education and
establishments of science. Thus, from all sources LTL 656,653
thousand were allocated for financing science and studies in
2001, which comprises 1.39 percent of the gross domestic
product.
5.3. The representative of the party concerned points out
that under Article 2 of the Republic of Lithuania Law on
Education, the educational system of Lithuania shall comprise
pre-school education, general education of children and young
people, vocational and further education, higher education, and
education of the adults. Therefore, in the course of
establishment of the amounts of allocations designated for
education, the allocations from the state budget for
establishments of higher education are included. LTL 407,903
thousand were allocated for establishments of higher education
in 2001.
5.4. In addition, under Article 10 of the Law on
Education, state educational establishments may be founded by
the Ministry of Education and science, other ministries and
chiefs of counties, and these educational establishments are
financed with funds from the state budget. Local government
councils may found local government educational establishments
providing with primary, basic and secondary education, as well
as establishments of pre-school, additional and adult informal
education. These establishments are financed from the funds of
local governments budgets. A. Brazdilienė maintains that LTL
677,841 thousand were allocated to educational establishments
(schools of general education, boarding-schools, schools of
additional education, vocational schools, schools of further
education, as well as for the purpose of raising one's
qualification) from the state budget, LTL 28,113 thousand are
provided to be allocated from the Privatisation Fund and LTL
100,850 thousand are provided to be allocated from loans
received in the name of the state and with the state guarantee
for investment projects of educational establishments. LTL
1,849 thousand are provided to be allocated for education from
the budgets of local governments.
5.5. According to the calculations of the representative
of the party concerned, from all sources LTL 3,064,382 thousand
were allocated for financing education in 2001, i.e. 6.5
percent of the gross domestic product. She maintains that
sufficient funds were allocated for education, science and
studies from the state budget, funds disposed of by the state
and other sources (Privatisation Fund, loans in the name of the
state and with the state guarantee) as well as local
governments budgets in 2001. The provisions of the Law on
Long-term Financing of Science and Education have been
implemented. In the course of the enactment of the Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000)
Article 41 of the Constitution was not violated.
6. The representative of the party concerned notes that
the Law on Amending the Law on Local Self-Government, whereby
the Law on Local Self-Government was set forth in a new
wording, went into effect on 27 October 2000. Under Paragraph 1
of Article 18 of the Law on Budgeting, the Government shall
submit the draft law on approving the financial indicators of
the state budget and budgets of local governments for a
particular year to the Seimas not later than 75 days before the
end of the budget year, i.e. not later than until October 17.
The Law on Approving the Financial Indicators of the 2001 State
Budget and Budgets of Local Governments (wording of 19 December
2000) was drafted on the basis of the previous wording of the
Law on Local Self-Government.
Article 16 of the Law on Local Self-Government of the
previous wording defined the competence of local governments
delegated by the state: self government institutions were to
perform the functions of civil registration, keep the register
of local governments', state and private enterprises, as well
as of public organisations, to perform secondary healthcare
supervision, they were also permitted to administer state parks
(national and regional), organise the municipal police, civil
security and fire prevention system, and implement other
functions delegated by laws. Paragraph 8 of Article 23 of the
said law provided that funds to finance the functions delegated
by the state shall be allocated from the Budget of the State of
Lithuania, however, it was not provided under what procedure
the said funds must be allocated.
Article 23 of the Law on Budgeting provides that subsidies
of local governments budgets are used for the implementation of
the Law on Local Self-Government and other laws, i.e. to
perform the state delegated functions to local governments by
laws and carry out the programmes approved by local government
councils. The Law on the Methodology of Determination of Local
Governments Budgetary Revenues establishes the sources of local
governments budgets revenues and the procedure for calculation,
approval and transfer of subsidies and finances allocated to
local governments budgets from the state budget. Item 10 of
Article 10 of this law provides that the Seimas shall approve
the planned budgetary expenditures of all local governments as
part of the common state and local governments budgetary
expenditures in percentages. Article 6 of this law provides how
the amount of general subsidy from the state budget is
calculated. If the planned tax and non-tax derived revenues of
local governments budgets are not sufficient to cover the
expenditures of local governments budgets, a general subsidy is
allocated from the state budget.
A. Brazdilienė maintains that the general subsidy of LTL
89,426 thousand was allocated from the state budget to local
governments budgets.
The representative of the party concerned does not agree
with the statement of the petitioners that, allegedly,
sufficient funds for the implementation of the local
governments functions delegated by the state as pointed out by
the petitioner were not allocated in 2001. In the course of the
approval of the financial indicators of local governments
budgets and the amount of their expenditures, one also assesses
the need for funds for performing of the functions delegated by
the state. In the opinion of the representative of the party
concerned, such a procedure of determination of local
governments budgets expenditures and allocation of finances for
the performance of state delegated functions to the local
governments is in conformity with Article 16 and Paragraph 8 of
Article 23 of the Law on Local Self-Government. A. Brazdilienė
is of the opinion that in the course of the enactment of the
Law on Approving the Financial Indicators of the 2001 State
Budget and Budgets of Local Governments (wording of 19 December
2000) Paragraph 2 of Article 120, Paragraph 1 of Article 121
and Paragraph 1 of Article 127 of the Constitution were not
violated, either.
A. Brazdilienė points out that, in 2001, a special subsidy
was allocated to local governments from the state budget (LTL
46 thousand for each local government) to create a job of the
servant of a local government performing the functions of
administering the national service, i.e. for particular
expenditures whose amount is not determined by social,
demographic and other indicators of local governments. In her
opinion, this is in compliance with Paragraph 5 of Article 11
and Item 3 of Paragraph 2 of Article 6 of the Law on the
Methodology of Determination of Local Governments Budgetary
Revenues and with the Constitution.
7. The representative of the party concerned points out
that Paragraph 2 of Article 17 of the Law on Budgeting provides
that a draft state budget shall be prepared for three budget
years on the basis of strategic planning principles, this law,
other laws and legal acts, macroeconomic forecasts of economic
development of this country, the Programme of the Government,
the Long-term Plan of the Government Activities, plans of
strategic activities of ministries and Government
establishments and on the approved preliminary basic indicators
of the national budget, as well as on the programmes and draft
expenditure estimates presented by the possessors of state
budget subsidies.
The representative of the party concerned also points out
that under Article 10 of the Law on the Methodology of
Determination of Local Governments Budgetary Revenues, the
Government, after consideration with the Local Governments
Association of Lithuania, shall submit to the Seimas for
approval for a three-year period the expected expenditures of
the budgets of all local governments as a portion of common
expenditures of the state and local governments budgets in
percentages, the expected amount of tax-derived revenues of all
local governments budgets, the expected amount of non
tax-derived revenues of all local governments budgets as a
fixed portion of tax-derived revenues in percentages, the
expected sums of special targeted subsidies from the state
budget, the expected amount of the general subsidy to local
governments from the state budget and other indicators of local
governments.
A. Brazdilienė maintains that the Seimas, while taking
account of these provisions, together with the law on approving
the financial indicators of the state budget and budgets of
local governments for a particular year adopts a resolution
wherein the main three-year national budget indicators are
presented: the expected national budget revenues, expected
expenditures of the state budget and the budgets of local
governments, and adopts a law on the approval of indicators
determining the amount and levelling of revenues of local
governments budgets for a three-year period. In the course of
the drafting and drawing up the law on approving the financial
indicators of the state budget and the budgets of local
governments for a particular year, one assesses the
macroeconomic indicators, their match with the expectation, one
takes account of the reforms intended to be carried out,
tendencies in the fiscal policy, and one respectively corrects
the financial indicators of the state budget and those of local
governments budgets.
In the opinion of the representative of the party
concerned, if one agreed with the consideration of the
petitioners that the indicators determining the amount and
levelling of revenues approved in 1999 ought to be valid till
2002, there would be a legal collision, since the law on
approving the financial indicators of the state budget and the
budgets of local governments for a particular year, while
taking account of the corrected indicators, would approve
tax-derived revenues of local governments budgets, the general
and special targeted subsidy of the state budget (Article 11 of
Law on the Methodology of Determination of Local Government
Budgetary Revenues), i.e. the same indicators as in the law on
the approval of indicators determining the amount and levelling
of revenues of local governments for a three-year period,
however, their amount would be different.
The representative of the party concerned also points out
that Article 1 of the Republic of Lithuania Law on the Approval
of Indicators Determining the Amount and Levelling of Revenues
of Local Governments Budgets for 1998 and 1999 contained the
provision that the indicators approved the previous year shall
not be amended. The Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2000, 2001 and 2002 does not contain
such a provision.
Therefore, according to A. Brazdilienė, the Law on the
Approval of Indicators Determining the Amount and Levelling of
Revenues of Local Governments Budgets for 2001, 2002 and 2003
was adopted without violating Article 10 and Paragraph 6 of
Article 11 of the of Law on the Methodology of Determination of
Local Government Budgetary Revenues. A. Brazdilienė maintains
that the disputed Law on the Approval of Indicators Determining
the Amount and Levelling of Revenues of Local Governments
Budgets for 2001, 2002 and 2003 is in compliance with the
Constitution.
8. On the grounds of the arguments set forth, the
representative of the party concerned maintains that the
disputed Law on Approving the Financial Indicators of the 2001
State Budget and Budgets of Local Governments (wording of 19
December 2000), and the Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2001, 2002 and 2003 both in terms of
their enactment procedure and in terms of their content are in
compliance with the articles (parts thereof) of the
Constitution which have been pointed out by the petitioner.
IV
In the course of the preparation of the case for the
judicial investigation, additional explanations were received
from the representatives of the petitioner P. Papovas and J.
Sabatauskas, both are members of the Seimas, concerning the
arguments of the petitioner, as well as the explanations
concerning the counter-arguments of the representative of the
party concerned.
V
In the course of the preparation of the case for the
judicial investigation explanations were received from G.
Kniukšta, Chairman of the Seimas Committee on Rural Affairs, R.
Pavilionis, Chairman of the Seimas Committee on Education,
Science and Culture, K. Rimšelis, Deputy Chairman of the Seimas
Committee on State Administration and Local Authorities, D.
Grybauskaitė, Minister of Finance of the Republic of Lithuania,
A. Monkevičius, Minister of Education and Science of the
Republic of Lithuania, J. Kraujelis, Minister of Agriculture of
the Republic of Lithuania, A. Astrauskas, Vice-minister of the
Interior, Dr. M. Starkevičiūtė, a teacher of the International
Business School, Vilnius University, Assoc. Prof. Dr. I.
Čepienė, Head of the Department of Finance and Credit of the
Faculty of Economics, Vilnius University, Assoc. Prof. Dr. A.
Misiūnas who works at the Department of System Analysis of
Economy of the Faculty of Economics, Vilnius University, Prof.
Habil. Dr. A. Kusta, Rector of the Lithuanian University of
Agriculture, Assoc. Prof. Dr. L. Katkevičius, Head of the Water
Management Department of the Faculty of Water and Land
Management, the Lithuanian University of Agriculture, D.
Stanikūnas, Director of the Lithuanian Institute of Agrarian
Economics, Dr. A. S. Šileika, Director of the Water Management
Institute, Dr. V. Morkūnas, Deputy Director of the same
institute, Dr. V. Šaulys, Head of the Exploitation Laboratory
of the same institute, G. Steponavičienė, Vice President of the
Lithuanian Free Market Institute, R. Šimašius and Dr. R.
Vilpišauskas, senior experts of the same institute, Dr. G.
Nausėda, advisor to the President of the joint-stock company
Vilniaus bankas, J. Saladžius, Head of Vilnius Lawyers Office
VII associated with the PriceWaterhouse Coopers, J.
Kabašinskas, Director General of Deloitte & Touche, S.
Šiupšinskas, Director of the Association of Local Governments
of Lithuania, Prof. Dr. J. Antanavičius, President of the
Conference of Rectors of Lithuanian Universities, Dr. K.
Sivickas, Chairman of the Association of Lithuanian Enterprises
of Land Reclamation, J. Petraškienė, Chairwoman of the
Lithuanian Union of Land Planning and Hydrotechnology
Engineers.
VI
1. At the court hearing the representative of the
petitioner V. P. Andriukaitis, a Seimas member, virtually
reiterated the arguments set forth in the petition.
2. V. P. Andriukaitis additionally noted that special
procedures and time limits are provided in the Constitution for
enactment of the law on the state budget. Drafting of the state
budget is the right of the Government. The Seimas does not
enjoy such a right.
According to the representative of the party concerned,
the Seimas may establish by individual laws that certain
portions from the state budget or gross domestic product
(expressed in percentages) must be allocated for financing
certain sectors. Such laws are enacted not under the said
special procedure established in the Constitution for the
enactment of the law on the state budget. By such laws the
right of the Government to independently draft the state budget
might be restricted.
Alongside, the representative of the petitioner noted that
there is no unanimous opinion as to the interpretation of the
provision of Paragraph 2 of Article 131 of the Constitution
that expenditures established by law may not be reduced as long
as said laws are not amended, particularly, whether this
provision refers to the state budget law, or laws establishing
that for the purpose of financing certain sectors certain
portions from the state budget or the gross domestic product
must be allotted.
The Constitutional Court
holds that:
I
1. On 19 December 2000, the Seimas passed the Law on the
Approval of Financial Indicators of the 2001 State Budget and
Budgets of Local Governments, and on 21 December 2000 it passed
the Law on the Approval of Indicators Determining the Amount
and Levelling of Revenues of Local Governments Budgets for
2001, 2002 and 2003.
On 12 July 2001, the Seimas passed the Republic of
Lithuania Law on Amending the Law on the Approval of Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (Official Gazette Valstybės žinios, 2000, No.
111-3567), which amended Article 1, Paragraph 5 of Article 2,
Article 4, Article 5, Paragraph 2 of Article 7, Paragraph 1 of
Article 8, Article 9 of the disputed Law on the Approval of
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) as well as its
Annexes 1, 2, 3, 4, 5, 8, 9, 10, and supplemented its Article 8
with Paragraph 3, and Article 9 with Items 7, 8 and 9.
On 11 December 2001, the Seimas passed the Republic of
Lithuania Law on Amending and Supplementing the Law on the
Approval of Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (Official Gazette Valstybės
žinios, 2001, No. 105-3739), which amended Paragraph 5 of
Article 2, Item 8 of Article 9 of the Law on the Approval of
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments as well as the part titled Allocations of
Annex 1, Annexes 2, 8, 10, and supplemented it with Articles 14
and 15.
2. The petitioner requests to determine whether the Law on
the Approval of Financial Indicators of the 2001 State Budget
and Budgets of Local Governments (wording of 19 December 2000)
and the Law on the Approval of Indicators Determining the
Amount and Levelling of Revenues of Local Governments Budgets
for 2001, 2002 and 2003 are in compliance with Paragraph 1 of
Article 69 in terms of their enactment procedure, while in
terms of its content, with Paragraph 3 of Article 41, Paragraph
1 of Article 69, Paragraph 2 of Article 120, Paragraph 1 of
Article 121, Paragraph 1 of Article 127, and Paragraph 2 of
Article 131 of the Constitution.
3. According to the arguments stated in the petition, the
petitioner has doubts whether:
1) the Law on the Approval of Financial Indicators of the
2001 State Budget and Budgets of Local Governments (wording of
19 December 2000) is in compliance with Paragraph 3 of Article
41, Paragraph 1 of Article 69, Paragraph 2 of Article 120,
Paragraph 1 of Article 121, Paragraph 1 of Article 127 of the
Constitution as well as the provision contained in Paragraph 2
of Article 131 thereof that expenditures established by laws
may not be reduced as long as these laws are not amended;
2) the Law on the Approval of Indicators Determining the
Amount and Levelling of Revenues of Local Governments Budgets
for 2001, 2002 and 2003 is in compliance with Paragraph 1 of
Article 69, Paragraph 2 of Article 120, Paragraph 1 of Article
121, Paragraph 1 of Article 127 of the Constitution as well as
the provision contained in Paragraph 2 of Article 131 thereof
that expenditures established by laws may not be reduced as
long as these laws are not amended.
4. Following the petitioner's request, the Constitutional
Court will determine whether the Law on the Approval of
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) is in
compliance with Paragraph 3 of Article 41, Paragraph 1 of
Article 69, Paragraph 2 of Article 120, Paragraph 1 of Article
121, Paragraph 1 of Article 127 of the Constitution as well as
the provision contained in Paragraph 2 of Article 131 thereof
that expenditures established by laws may not be reduced as
long as these laws are not amended, and whether the Law on the
Approval of Indicators Determining the Amount and Levelling of
Revenues of Local Governments Budgets for 2001, 2002 and 2003
is in compliance with Paragraph 1 of Article 69, Paragraph 2 of
Article 120, Paragraph 1 of Article 121, Paragraph 1 of Article
127 of the Constitution as well as the provision contained in
Paragraph 2 of Article 131 thereof that expenditures
established by laws may not be reduced as long as these laws
are not amended.
II
1. Paragraph 1 of Article 127 of the Constitution
prescribes: "The budgetary system of the Republic of Lithuania
shall consist of the independent State Budget of the Republic
of Lithuania and the independent local governments budgets."
Paragraph 1 of Article 121 of the Constitution prescribes:
"Local governments shall draft and approve their own budget."
Paragraph 1 of Article 131 of the Constitution prescribes:
"The draft budget of the State shall be considered by the
Seimas, and shall be approved by law by the beginning of the
new budget year."
Thus, according to the Constitution, the state budget and
budgets of local governments are independent. Together they
form Lithuania's budgetary system.
2. It is generally recognised that the state budget is a
plan of revenues and expenditures over a certain period of
time, i.e. a state's financial plan for the purpose of
redistributing public funds. Similarly, the budgets of local
governments are local governments plans of revenues and
expenditures over a certain period of time. Under Article 129
of the Constitution, this period is the budget year lasting
from January 1 till December 31. Legally, the state budget is a
law that approves the state budget, i.e. plan of revenues and
expenditures, for the budget year.
According to the constitutional concept of the state
budget, the state revenues and expenditures planned for the
budget year have to be provided for in the state budget
approved by law.
3. Paragraph 2 of Article 127 of the Constitution
prescribes that the state budget revenues shall be accrued from
taxes, compulsory payments, dues, receipts from state property,
and other income, while Paragraph 3 thereof prescribes that
taxes, other budgetary payments and dues shall be established
by the laws of the Republic of Lithuania.
4. Pursuant to Item 4 of Article 94 of the Constitution,
the Government shall draft the state budget and submit it to
the Seimas. Article 130 of the Constitution provides that the
Government shall draft the state budget and submit it to the
Seimas not later than 75 days before the end of the budget
year, and Item 14 of Article 67 of the Constitution prescribes
that the Seimas shall approve the state budget, and Paragraph 1
of Article 131 thereof establishes that the draft state budget
shall be considered by the Seimas and shall be approved by law
by the beginning of the new budget year.
Paragraph 2 of Article 131 of the Constitution prescribes
that, upon considering the draft budget, the Seimas may only
increase expenditures upon specifying financial sources for
said expenditures. Expenditures established by law may not be
reduced as long as said laws are not amended.
Paragraph 2 of Article 132 of the Constitution provides
that during the budget year the Seimas may change the budget.
It shall be changed according to the same procedure by which it
was drafted, adopted and approved. As necessary, the Seimas may
approve an additional budget.
5. The constitutional concept of the state budget implies
a presumption that the drafting (forming) of the state budget,
its consideration in the Seimas and its approval by law, as
well as its implementation, are separate steps of the budgetary
process.
6. While drafting (forming) the state budget as well as
while considering and approving it, the powers of the Seimas as
a legislative body and the powers of the Government as an
executive body are separated; the constitutional principle of
the separation of powers has to be ensured in this area.
6.1. The Constitutional Court has held a number of times
that the constitutional principle of the separation of powers
means that the legislative, the executive and the judicial
powers have to be separated, they have to be sufficiently
independent, although there has to be a balance between them,
and that each state institution has its purpose-consistent
competence. It also means that the specific content of the
competence of an institution depends on the place of that
institution of state power in the overall system of powers as
well as its relation to the other powers, on the place of the
institution among the other institutions and the inter-relation
between its powers and the powers of the other institutions;
and since the Constitution directly establishes the powers of
each particular institution, one institution cannot take over
the functions of another, it cannot transfer or waive them, and
these powers cannot be changed or restricted by law. The Seimas
does not have the right to commission the Government or any
other institution to implement the constitutional competence of
the Seimas.
6.2. Under the Constitution, only the Government has the
right and duty to draft (form) the state budget. Once the
Government has drafted the state budget, it submits it to the
Seimas for approval following the terms provided for in the
Constitution. By the Constitution, during the budget year the
budget may be changed also only upon the proposal of the
Government. An additional budget is approved by law upon the
proposal of the Government as well. The drafting (forming) of
the state budget and its submission to the Seimas belong to the
sphere of the Government's decision-making in regard to state
administration as prescribed by the Constitution. Therefore,
the draft state budget is submitted to the Seimas upon the
resolution of the Government.
The Government not only exercises a constitutional right,
but also has a constitutional duty to provide for specific
revenue sources in the draft state budget, indicate their
amounts as well as specific amounts intended for financing the
needs of the state and the society.
While submitting the draft budget to the Seimas, the
Government must substantiate the revenues and allocations
indicated therein with the evaluation of the needs and
possibilities of the state and the society. This information
has to be public. The draft state budget prepared by the
Government has to provide for funds necessary for the
implementation of laws.
6.3. Only the Seimas has the prerogative to consider the
draft state budget submitted by the Government and approve it
by law. According to the Constitution, the adoption of the law
on the state budget constitutes a final step in the formation
of the budget.
Upon considering the draft budget, the Seimas may only
increase expenditures upon specifying financial sources for
said expenditures (Paragraph 2 of Article 131 of the
Constitution). If the State Budget is not approved by the
prescribed date, monthly budget expenditures at the beginning
of the budget year may not exceed one-twelfth of the State
Budget expenditures of the previous budget year (Paragraph 1 of
Article 132 of the Constitution).
6.4. According to the Constitution, the budget year
coincides with a calendar year. The Seimas must approve the
state budget for the budget year, and not for some other period
of time. Each budget year the Seimas must form the state budget
for the following budget year taking into consideration the
existing social and economic situation, the needs and
possibilities of the society and the state, the available or
potential financial resources and the liabilities of the state,
as well as a number of other important factors. While passing
the law on the state budget, the Seimas must pay attention to
the aim for a just and harmonious society enshrined in the
Constitution.
6.5. Upon the statutory approval of the state budget, the
Seimas approves the revenues and allocations of the state
budget, based on the evaluation of the needs and possibilities
of the society and the state. The constitutional concept of the
budgetary process implies a presumption that all the income
sources of the state budget, planned revenues and expenditures
out of the state budget, the amount of these funds, and
entities to whom allocations from the state budget are given
must be specified in the law on the state budget.
Establishing entities eligible to the allocations from the
state budget falls solely within the competence of the Seimas.
The Seimas may not waive or transfer it to another institution,
and the latter cannot take it over. Otherwise the competence of
the Seimas to form the state budget would be denied, this
competence would become shared with the executive, which would
deny the constitutional principle of the separation of powers.
Acts issued by the executive bodies can only deal with the
execution of the state budget and they cannot compete with the
law on the state budget or change it.
6.6. Once approved by the Seimas, the state budget becomes
a law. Pursuant to Item 4 of Article 94 of the Constitution,
the Government shall execute the state budget. The provision of
Item 4 of Article 94 of the Constitution that the Government
shall execute the state budget means that the Government has a
duty to ensure that the budget receives the specified revenues
and that these funds are transferred to the entities specified
in the law on the state budget. The Constitutional Court has
previously held that under the Constitution, the Government has
to implement the approved state budget according to its purpose
and to the extent prescribed by the budget law, and that it
does not have the right to change the amounts of the
allocations or their possessors established in the budget law
(Constitutional Court ruling of 3 June 1999).
7. Paragraph 2 of Article 131 of the Constitution
provides, inter alia, that expenditures established by laws may
not be reduced as long as these laws are not amended.
7.1. While interpreting the provision of Paragraph 2 of
Article 131 of the Constitution, it should be noted that if
certain laws provide for certain expenditures, then the
Government has to follow these laws in the preparation of the
draft state budget and implement them. According to the
Constitution, the Government has a duty to submit to the Seimas
such a draft state budget which would be consistent with the
statutory provisions pertaining to public expenditures.
7.2. The Constitutional Court has previously held that in
the preparation and adoption of legal acts, public institutions
must adhere to the principle of the rule of law enshrined in
the Constitution, and that the provision contained in Paragraph
2 of Article 5 of the Constitution that the scope of powers
shall be defined by the Constitution means that the Seimas, the
legislature, is independent insofar as its powers are not
restricted by the Constitution (Constitutional Court ruling of
12 July 2001).
Under the Constitution, the Seimas is bound by the laws
passed by itself. Thus if certain laws provide for certain
expenditures, the Seimas must follow them during the
deliberation and approval process of the state budget. Pursuant
to Paragraph 2 of Article 131 of the Constitution, during the
approval process of the state budget, expenditures established
by laws may not be reduced as long as these laws are not
amended.
7.3. It follows from the constitutional concept of the
state budget, namely from the provision contained in Article
129 of the Constitution prescribing that the budget year starts
on January 1 and ends on December 31, that laws providing for
certain expenditures cannot establish such legal regulation
which would deny the Government's constitutional right and duty
to form the state budget for the budget year and the Seimas'
constitutional right and duty to approve the state budget for
the budget year. Such laws cannot change the law on the state
budget. The provision of Paragraph 2 of Article 131 of the
Constitution, prescribing that expenditures established by laws
may not be reduced as long as these laws are not amended,
cannot be interpreted as allowing to provide for such funding
of certain needs that is not included in the law on the state
budget of a respective year.
It is worth noting that the laws specified in Paragraph 2
of Article 131 of the Constitution that provide for certain
expenditures are not laws that would substitute for or change
the law on the state budget. These are laws enabling to ensure
the succession of the relations of the state budget each budget
year as well as the financial continuity when the persistent
pursuit of certain public objectives (special, long-term,
strategic) requires more funds than it is possible to allot in
one budget year.
Thus the laws specified in Paragraph 2 of Article 131 of
the Constitution that provide for certain expenditures are an
exception rather than a rule. It should be stressed that such
laws can only provide for expenditures necessary in order to
achieve a defined, generally important goal over a certain
period of time established by law, provided these needs cannot
be satisfied in one budget year. Such laws may not provide for
funds necessary for the execution of routine functions of the
state, for funds necessary to finance every-day needs of the
society. Otherwise the constitutional concept of the state
budget would be distorted: the constitutional institute of the
budget year would lose its purpose, the constitutional right
and duty of the Government to prepare the draft state budget
and the constitutional right and duty of the Seimas to approve
it for the budget year, taking into consideration the existing
social and economic situation, the needs and possibilities of
the society and the state, the available or potential financial
resources and the liabilities of the state, as well as a number
of other important factors, would be denied. This would also
result in preconditions for violating the constitutional
imperative of social justice and social harmony.
III
On the compliance of the Law on the Approval of Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) with Paragraph 3 of
Article 40 and Paragraph 3 of Article 41 of the Constitution as
well as the constitutional principle of the separation of
powers.
1. In the opinion of the petitioner, the Law on the
Approval of Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000) does
not provide for sufficient funds necessary to ensure the human
rights enshrined in Article 41 of the Constitution, which
violates the provisions of Paragraph 3 of Article 41 thereof
prescribing that everyone shall have equal opportunities to
attain higher education according to their individual
abilities, and that citizens who demonstrate suitable academic
progress shall be guaranteed education at State establishments
of higher education free of charge.
2. Paragraph 3 of Article 41 of the Constitution provides:
"Everyone shall have an equal opportunity to attain higher
education according to their individual abilities. Citizens who
demonstrate suitable academic progress shall be guaranteed
education at establishments of State higher education free of
charge."
3. The Constitution is an integral act (Paragraph 1 of
Article 6 of the Constitution). The construction of certain
provisions of the Constitution cannot deny its other
provisions. The content of the provisions contained in
Paragraph 3 of Article 41 of the Constitution that have been
specified by the petitioner should be construed in a systematic
way, in the context of the entire constitutional regulation.
4. Under the Constitution, everyone has the right to
higher education accessible according to his abilities. In
state higher schools, citizens who demonstrate good academic
results have the right to get education free of charge. The
human right to seek higher education is an important condition
for the implementation of one's different rights and legitimate
interests. The constitutional human right to seek higher
education presumes the state's duty to ensure preconditions
necessary in order to implement this right.
5. Paragraph 3 of Article 41 of the Constitution should be
construed in the context of the aim for an open, just,
harmonious civil society and law-governed state as well as
public solidarity. The availability of higher education to
everyone according to their individual abilities and guarantee
of education free of charge in the state establishments of
higher education to citizens who demonstrate good academic
results are both aimed at ensuring the common interest of these
persons, the society and the state, which is a need for
specialists with higher education in different areas.
6. According to Paragraph 3 of Article 41 of the
Constitution, every person has the right to higher education
according to their individual abilities.
6.1. Paragraph 3 of Article 41 of the Constitution refers
to state higher schools. Pursuant to Paragraph 2 of Article 40
thereof, non-governmental teaching and educational institutions
may be established according to the procedure prescribed by
law. These provisions presume that not only state but also
non-state higher schools may function in Lithuania. State
higher schools have to be allotted state funds that have to be
provided for in the state budget.
The constitutional provision that higher education is
available to everyone according to his abilities means that
both state and non-state higher schools established according
to the procedure prescribed by law, the entire system of higher
education establishments, have to be accessible to every
person. This provision also means that those who seek higher
education cannot be subjected to requirements that are based on
criteria other than their abilities. The said provision is
closely related to the principle of equality of individuals
enshrined in Article 29 of the Constitution, to the provision
contained in Paragraph 2 thereof that a person may not have his
rights restricted in any way, or be granted any privileges, on
the basis of his or her sex, race, nationality, language,
origin, social status, religion, convictions, or opinions.
It should be noted that state institutions have the duty
not only not to impose any requirements inconsistent with the
constitutional principle of equality of persons on those who
seek higher education, but also to ensure that higher schools
do not impose such requirements themselves. The law must
provide for such legal regulation that would ensure everyone an
opportunity to seek higher education according to their
individual abilities.
6.2. There has to be a balance between the legitimate
interests of a person and the needs of both the society and the
state. The financial possibilities of the state (including
possibilities to fund higher education) are not and cannot be
unlimited. The constitutional provisions that higher education
shall be available to everyone according to their individual
abilities cannot be interpreted as imposing a duty on the state
to ensure funding of any higher education for anyone capable of
seeking it without proper consideration of the needs and
possibilities of the society and the state. The constitutional
provisions that higher education shall be available to everyone
according to their individual abilities cannot be interpreted
in a way that would deny an individual's constitutional right
to seek higher education according to his abilities even when
the state does not finance his education because that would
exceed the needs and possibilities of the society and the
state. The need of the society and the state to have graduate
specialists in various areas and the possibility to finance
only a certain number of specialists cannot be an obstacle for
a person to seek higher education according to his abilities
not at the expense of the state even when this exceeds the
needs and possibilities of the society and the state.
It follows from Paragraph 3 of Article 41 of the
Constitution that if a state higher school is able to provide
higher education in accordance with the requirements set by the
state not only to the persons whose studies are financed by the
state but also to those who seek higher education in a state
higher school not at the expense of the state, then the legal
regulation obstructing or even prohibiting a state higher
school to admit these persons to that higher school cannot be
established.
7. Paragraph 3 of Article 41 of the Constitution
establishes the right of every citizen with a good academic
progress in a state higher school to free higher education.
This right presumes that funds must be provided out of the
state budget to guarantee higher education free of charge to
citizens who demonstrate good academic progress in state higher
schools.
7.1. According to the Constitution, the state must cover
tuition for citizens who demonstrate good academic results in
case of the following three conditions: 1) the student is a
citizen of the Republic of Lithuania; 2) he studies at a state
higher school; 3) he demonstrates good academic results, i.e.
his academic results meet the established criteria of good
academic results.
Pursuant to Paragraph 3 of Article 41 of the Constitution,
higher education tuition of citizens who are students at state
higher schools and demonstrate good academic results cannot be
imposed on these persons themselves in whatever form. Higher
education of citizens who are students at state higher schools
and demonstrate good academic results is financed by the state.
According to the Constitution, the state has a duty to provide
for the principles and procedure of allocation of state funds
necessary to finance tuition of citizens who are students at
state higher schools and demonstrate good academic results, and
also to establish control of their legal utilisation.
On the other hand, the Constitution does not contain a
prohibition for the state to undertake higher financial
obligations, in accordance with its possibilities, to students
of higher schools. The undertaking of higher financial
obligations than implied in the constitutional provision
stipulating that citizens who demonstrate good academic results
shall be guaranteed education free of charge in state higher
schools, should not deny the aim for a just and harmonious
society enshrined in the Constitution.
7.2. The constitutional provision that citizens who
demonstrate good academic results shall be guaranteed education
free of charge in state higher schools means that a citizen who
demonstrated good academic results has the right that his
education in a state higher school be financed by the state.
According to the Constitution, it is financed out of the funds
of the state budget. Therefore, the criteria enabling to
establish which students can be said to demonstrate good
academic results and which would, consequently, as prescribed
by the Constitution, have the right that their education in
state higher schools be financed by the state, should be
established by law.
8. Paragraph 3 of Article 40 of the Constitution provides
that institutions of higher learning shall be granted autonomy.
"The autonomy of the higher school is traditionally understood
as the right to independently determine and establish, in its
regulations or statute, its organisational and administrative
structure, relations with other partners, order of research and
studies, academic syllabus, student enrolment procedure, also
the right to resolve other related issues, utilise acquired
property as well as property given by the state, possess
territory, buildings and other property necessary for research
and studies, and the guarantee of inviolability. For that
purpose, the higher school is guaranteed institutional
autonomy, i. e. certain status, which means that there are
certain areas of activities that are not under the control of
the executive" (Constitutional Court ruling of 27 June 1994).
The Constitution guarantees autonomy to both state and
non-state higher schools.
The fact that pursuant to the Constitution the system of
establishments of higher education, including state higher
schools, has to be available to every person according to his
abilities, that citizens who demonstrate good academic results
shall be guaranteed education free of charge in state higher
schools, and the fact that the Constitution establishes the
autonomy of higher schools, allow to make a presumption that to
perform their functions state higher schools need to be
allotted state funds. These funds have to be provided for in
the state budget. The essential guarantee of the autonomy of
state higher schools is such legal regulation when the state
budget law provides not only for allocations for higher
education but also funds for each state higher school. While
providing for state budget funds for state higher schools, the
needs of the society and the state ensured by these schools,
their existing and future programs, also their way of ensuring
adherence to the set teaching standards, the correspondence of
the content and level of teaching to the qualification
recognised by the state, state obligations to these schools
etc. should be considered.
9. In the opinion of the petitioner, the funds provided
for in the state budget of 2001 for the implementation of the
human rights enshrined in Paragraph 3 of Article 41 of the
Constitution were insufficient.
9.1. Part (continuation) titled Allocations of Annex 1,
titled The 2001 State Budget of the Republic of Lithuania, of
the Law on the Approval of Financial Indicators of the 2001
State Budget and Budgets of Local Governments (wording of 19
December 2000) provides for allocations for the Ministry of
Education and Science (Chapter I, Ministries), the Department
for Education and Science under the Ministry of Education and
Science (Chapter III, Departments, Services and Inspectorates),
and education and studies (Chapter VI, Establishments and
Organisations of Education, Culture and Others). Annex 2
thereto, titled Allocations from the 2001 State Budget of the
Republic of Lithuania, provides for allocations for education
and fundamental scientific research. Neither allocations for
state higher schools nor allocations for financing citizens who
demonstrate good academic results are separately specified.
9.2. Education, science, and studies are inter-related
areas. Institutions where scientific research is carried out
quite often are also involved in educational activities and
studies take place there. And, vice versa, apart from direct
educational activities and studies, educational and teaching
establishments (including higher schools) are also involved in
scientific research. The grouping of state budget funds to be
allocated for science, studies and education is not
unreasonable in itself. Some part of the funds from the 2001
state budget intended for science, studies and education have
obviously been allocated for financing state higher schools and
citizens who demonstrate good academic results. It should be
noted that the petitioner does not assert that funds for
financing higher education were not provided for in the 2001
state budget.
9.3. The assumption that sufficient funds for financing
higher education were not provided for in the state budget
cannot be an argument in judging whether the state budget law
for a particular year is in compliance with Paragraph 3 of
Article 41 of the Constitution. The question whether certain
needs (goals) are provided sufficient or insufficient funds
from the state budget is not about the compliance of the state
budget with the Constitution but about budget planning,
evaluation of the needs of the society and the state, their
balance with the possibilities of the society and the state,
and consequently social and economic expediency.
Therefore, there are no legal grounds to assert that the
regulation established by the Law on the Approval of Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) denied the rights
enshrined in Paragraph 3 of Article 41 of the Constitution an
that the implementation of these rights is not ensured.
10. Considering the above arguments, it may be concluded
that the Law on the Approval of Financial Indicators of the
2001 State Budget and Budgets of Local Governments (wording of
19 December 2000) is in compliance with Paragraph 3 of Article
41 of the Constitution.
11. At the same time the Constitutional Court notes that
the fact that this Ruling holds that the Law on the Approval of
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) is in
compliance with Paragraph 3 of Article 41 of the Constitution
cannot be interpreted as a recognition that the disputed law
provides for sufficient funds for the implementation of the
rights enshrined in Paragraph 3 of Article 41 of the
Constitution.
12. It has also been held herein that according to the
Constitution, state higher schools have to be allocated state
funds to be able to perform their functions and these funds
have to be provided for in the state budget, and an essential
guarantee of the autonomy of state higher schools is such legal
regulation when the state budget law provides not only for
allocations for higher education but also funds for each state
higher school.
In the Law on the Approval of Financial Indicators of the
2001 State Budget and Budgets of Local Governments (wording of
19 December 2000), allocations for state higher schools are not
separately specified. The fact that the state budget law does
not specify allocations for each state higher school separately
conflicts with the provision of Paragraph 3 of Article 40 of
the Constitution that higher schools shall be granted autonomy.
13. As mentioned above, the Law on the Approval of
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) did provide for
funds for state higher schools. However, the fact that this law
did not specify allocations for each state higher school
separately allowed allotting funds for each state higher school
by executive enactments, i. e. budget execution enactments.
Such legal regulation is not in accordance with the
constitutional principle of the separation of powers.
14. Considering the above arguments, it may be concluded
that the Law on the Approval of Financial Indicators of the
2001 State Budget and Budgets of Local Governments (wording of
19 December 2000), to the extent that it does not specify
allocations for each state higher school separately, conflicts
with Paragraph 3 of Article 40 of the Constitution and the
constitutional principle of the separation of powers.
IV
On the compliance of the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) with the provision of
Paragraph 2 of Article 131 of the Constitution that
expenditures established by law may not be reduced as long as
said laws are not amended as well as with the constitutional
principle of a law-governed state and on the compliance of
Article 16 of the Law on the State Regulation of Economic
Relations in Agriculture with Article 129, and the provision of
Paragraph 2 of Article 131 of the Constitution that
expenditures established by law may not be reduced as long as
said laws are not amended.
1. According to the petitioner, the Law on Approving the
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) conflicts with
the provision of Paragraph 2 of Article 131 of the Constitution
that expenditures established by law may not be reduced as long
as said laws are not amended.
The doubts of the petitioner are based on the fact that
1) Article 16 of the Republic of Lithuania Law on the
State Regulation of Economic Relations in Agriculture provides
that not less than 10% of the national budget expenditure as
well as foreign targeted loans and other funds shall be
generally allocated annually for implementing the national
agriculture development programme and the measures of state
regulation of relations in agriculture, for forming state food
product reserves, and for the purposes of land reclamation and
acid soil liming, meanwhile, in the opinion of the petitioner,
the Law on Approving the Financial Indicators of the 2001 State
Budget and Budgets of Local Governments (wording of 19 December
2000) provided to allocate LTL 618.7 million for the purposes
of agriculture, forestry, fishing industry and veterinary
medicine, i.e. 6.3 percent of the national budget expenditures;
2) Paragraph 5 of Article 7 of the Law on Land Reclamation
provides that the budgetary allocations for land reclamation
must guarantee a normal functioning of state-owned land
reclamation facilities, meanwhile, according to the petitioner,
the Law on Approving the Financial Indicators of the 2001 State
Budget and Budgets of Local Governments (wording of 19 December
2000) approved such a state budget which separately provided
only LTL 40 million for financing land reclamation, which was
not sufficient to guarantee a normal functioning of state-owned
land reclamation facilities;
3) Article 39 of the Republic of Lithuania Law on Special
Education provides that special education shall be financed
from the state and local governments budgets in accordance with
the procedure established by laws. Meanwhile, the Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000) did
not provide for funds for the implementation of the Law on
Special Education.
2. It has been held in this Ruling that the provision of
Paragraph 2 of Article 131 of the Constitution that
expenditures established by laws may not be reduced as long as
these laws are not amended means, inter alia, that if certain
laws provide for certain expenditures, then the Government has
to follow these laws in the preparation (forming) of the draft
state budget. If certain laws provide for certain expenditures,
the Seimas must also follow them during the deliberation and
approval process of the state budget.
It has also been held in this Ruling that laws providing
for certain expenditures cannot establish such legal regulation
that would deny the Government's constitutional right and duty
to form the state budget for the budget year and the Seimas'
constitutional right and duty to approve the state budget for
the budget year, while taking into consideration the existing
social and economic situation, the needs and possibilities of
the society and the state, the available or potential financial
resources and the liabilities of the state, as well as other
important factors.
It is not permitted to regulate the relations, which the
Constitution permits to regulate by the state budget law only,
by other, not state budget laws. The state revenues and
expenditures planned for a budget year may be provided only in
the state budget which is approved by law. The provision of
Paragraph 2 of Article 131 of the Constitution that
expenditures established by laws may not be reduced as long as
these laws are not amended is not to be construed as permitting
such financing of certain needs which would not be reflected in
the state budget law for a particular year. Non state budget
laws can only provide for expenditures necessary in order to
achieve a defined, generally important goal over a certain
period of time established by law, provided these needs cannot
be satisfied in one budget year, however, such laws may not
provide for funds necessary for the execution of routine
functions of the state, for funds necessary to finance
every-day needs of the society.
3. While deciding whether the Law on Approving the
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) from the aspect
pointed out by the petitioner is in compliance with the
provision of Paragraph 2 of Article 131 of the Constitution
that expenditures established by law may not be reduced as long
as said laws are not amended, it is important to ascertain
whether Article 16 of the Law on the State Regulation of
Economic Relations in Agriculture, Paragraph 5 of Article 7 of
the Law on Land Reclamation and Article 39 of the Law on
Special Education, which are pointed out by the petitioner,
provide for the subsidies which are not permitted to be reduced
in the course of the approving of the state budget without
amending the aforesaid laws.
4. Article 16 of the Law on the State Regulation of
Economic Relations in Agriculture provides: "Not less than 10%
of the national budget expenditure as well as foreign targeted
loans and other funds shall be generally allocated annually for
implementing the national agriculture development programme and
the measures of state regulation of relations in agriculture,
for forming state food product reserves, and for the purposes
of land reclamation and acid soil liming." The national budget
is a whole-complex of the state budget and local governments
budgets (Paragraph 12 of Article 2 and Paragraph 1 of Article 3
of the Law on Budgeting).
Thus Article 16 of the Law on the State Regulation of
Economic Relations in Agriculture not only indicates the needs
for the purpose of which funds from the national (i.e. the
state and local governments) budget are allocated and that
other funds may be allocated for the same needs but it also
provides for the portion of the national budget of each budget
year which must be allocated for the said needs.
4.1. It needs to be noted that the formula "not less than
10% of the national budget expenditure <...> shall be generally
allocated annually" (and, particularly, the word "generally")
implies that not less than 10% of the national budget
expenditure is a tentative portion of all national budget
expenditure. Such legal regulation lacks legal clarity.
4.2. It needs to be emphasised that the needs pointed out
in the said article are routine needs of the society, while
their financing is a constant duty of the state. After one has
established by the law that every year not less than a certain
portion of the national budget funds must be allocated for a
certain sector, pre-conditions are created to deny the
constitutional concept of a budget year, as well as the time
limit of the budget year established in Article 129 of the
Constitution. This law regulates the relations which, under the
constitutional concept of a budget year, may be regulated only
in the law on the state budget, it denies the constitutional
right and duty of the Government to draft (form) the state
budget for a budget year, as well as the constitutional right
and duty of the Seimas to form the state budget for a budget
year, while taking account of the existing socio-economic
situation, the needs and possibilities of the state and the
society, the available or potential financial resources and the
liabilities of the state and other important factors. The legal
regulation established in Article 16 of the Law on the State
Regulation of Economic Relations in Agriculture is not line
with the constitutional concept of the laws providing for
certain expenditures, pointed out in Paragraph 2 of Article 131
of the Constitution.
4.3. The Constitutional Court, having established that the
provisions of a law the compliance with the Constitution of
which is not disputed by the petitioner but by which the social
relations regulated by the disputed law are interfered with
conflict with the Constitution, must state so.
4.4. On the grounds of the arguments set forth, one is to
draw a conclusion that Article 16 of the Law on the State
Regulation of Economic Relations in Agriculture (Official
Gazette Valstybės žinios, 1995, No. 1-5; 1996, No. 116-2694;
1997, No. 96-2429; 2000, No. 30-828) conflicts with Article 129
and the provision of Paragraph 2 of Article 131 of the
Constitution that expenditures established by law may not be
reduced as long as said laws are not amended.
4.5. After one has held that Article 16 of the Law on the
State Regulation of Economic Relations in Agriculture conflicts
with Article 129 and the provision of Paragraph 2 of Article
131 of the Constitution that expenditures established by law
may not be reduced as long as said laws are not amended, it
must also be held that, after subsidies had been allocated by
the Law on Approving the Financial Indicators of the 2001 State
Budget and Budgets of Local Governments (wording of 19 December
2000) for the needs pointed out in Article 16 of the Law on the
State Regulation of Economic Relations in Agriculture,
irrespective of the fact whether these subsidies comprise 10
percent of the national budget expenditure as pointed out in
the aforesaid article or not, there are no grounds to assert
that the provision of Paragraph 2 of Article 131 of the
Constitution that expenditures established by law may not be
reduced as long as said laws are not amended may be violated.
5. Paragraph 5 of Article 7 of the Law on Land Reclamation
provides: "The Seimas of the Republic of Lithuania shall
approve budgetary allocations for the work to be performed in
the sphere of land reclamation according to the targeted
purpose. The budgetary allocations for land reclamation must
guarantee a normal functioning of state-owned land reclamation
facilities."
5.1. The aforesaid provision of Paragraph 5 of Article 7
of the Law on Land Reclamation establishes that, first, the
work to be performed in the sphere of land reclamation must be
financed from the state budget according to the targeted
purpose, and, second, the work to be performed in the sphere of
land reclamation must be financed so that a normal functioning
of state-owned land reclamation facilities would be guaranteed.
Paragraph 5 of Article 7 of the Law on Land Reclamation
does not point out specifically as to what amount of the
allocations from the state budget there should be so as to
guarantee a normal functioning of state-owned land reclamation
facilities.
5.2. It needs to be noted that the formula "must guarantee
a normal functioning of state-owned land reclamation
facilities" as used in Paragraph 5 of Article 7 of the Law on
Land Reclamation may not be construed as establishing a
quantitative criterion on the basis of which it might be
possible to calculate unambiguously whether sufficient
budgetary funds are provided for the work to be performed in
the sphere of land reclamation.
The provision of Paragraph 5 of Article 7 of the Law on
Land Reclamation that the budgetary allocations must guarantee
a normal functioning of state-owned land reclamation facilities
is not to be assessed as providing for expenditures which may
not be reduced as long as the law is not amended wherein this
provision is set forth. This provision is not related to the
provision of Paragraph 2 of Article 131 of the Constitution
that expenditures established by law may not be reduced as long
as said laws are not amended.
5.3. The Law on Approving the Financial Indicators of the
2001 State Budget and Budgets of Local Governments (wording of
19 December 2000) does not indicate separately allocations for
the work to be performed in the sphere of land reclamation.
The fact that the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) does not indicate
separately allocations for the work to be performed in the
sphere of land reclamation may not serve as the basis to hold
that this law conflicts with the provision of Paragraph 2 of
Article 131 of the Constitution that expenditures established
by law may not be reduced as long as said laws are not amended.
5.4. The provision of Paragraph 5 of Article 7 of the Law
on Land Reclamation that the Seimas shall approve budgetary
allocations according to the targeted purpose for the work to
be performed in the sphere of land reclamation implies that the
subsidies for land reclamation must be pointed out in the law
on the state budget itself but not in the acts meant for the
execution of the budget.
As mentioned, under the Constitution, the legislator is
bound by its previously adopted laws. This is an essential
element of the constitutional principle of a law-governed
state. Therefore, the Seimas is bound by the provision of
Paragraph 5 of Article 7 of the Law on Land Reclamation that
the budgetary allocations for the work to be performed in the
sphere of land reclamation are approved by the Seimas according
to the targeted purpose. As long as the said provision of the
Law on Land Reclamation is valid, the Seimas has a duty to
point out in the law on the state budget the allocations
according to the targeted purpose for the work to be performed
in the sphere of land reclamation and to indicate the
possessors of these allocations.
If the Law on Approving the Financial Indicators of the
2001 State Budget and Budgets of Local Governments (wording of
19 December 2000) does not point out allocations for the work
to be performed in the sphere of land reclamation according to
the targeted purpose, the provision that the legislator is
bound by its previously adopted laws is violated. Thus the
principle of a law-governed state entrenched in the
Constitution is violated.
5.5. On the grounds of the arguments set forth, one is to
conclude that the Law on Approving the Financial Indicators of
the 2001 State Budget and Budgets of Local Governments (wording
of 19 December 2000) to the extent that it does not point out
allocations according to the targeted purpose for the work to
be performed in the sphere of land reclamation conflicts with
the principle of a law-governed state.
6. Article 39 of the Law on Special Education provides
inter alia that special education shall be financed from the
state and local governments budgets in accordance with the
procedure established by laws.
It needs to be held that the provision of Article 39 of
the Law on Special Education that special education shall be
financed from the state and local governments budgets in
accordance with the procedure established by laws is not to be
assessed as providing for expenditures which may not be reduced
as long as the law is not amended wherein the said provision is
set forth. Alongside, it needs to be noted that this provision
is not related to the provision of Paragraph 2 of Article 131
of the Constitution that expenditures established by law may
not be reduced as long as said laws are not amended.
7. On the grounds of the arguments set forth, one is to
draw a conclusion that the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) is in compliance with
the provision of Paragraph 2 of Article 131 of the Constitution
that expenditures established by law may not be reduced as long
as said laws are not amended.
V
On the compliance of the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) with Paragraph 2 of
Article 120, Paragraph 1 of Article 121 and Paragraph 1 of
Article 127 of the Constitution.
1. In the opinion of the petitioner, the Law on Approving
the Financial Indicators of the 2001 State Budget and Budgets
of Local Governments (wording of 19 December 2000) conflicts
with Paragraph 2 of Article 120, Paragraph 1 of Article 121 and
Paragraph 1 of Article 127 of the Constitution.
The doubts of the petitioner are based on the fact that,
in his opinion, the Law on Approving the Financial Indicators
of the 2001 State Budget and Budgets of Local Governments
(wording of 19 December 2000) does not provide for funds from
the budget for the implementation of the local governments
functions delegated by the state, i.e. civil registry, civil
defence and fire-prevention, health activities etc. The doubts
of the petitioner are virtually based on the fact that, in his
opinion, the disputed law violates the independence of local
governments in the sphere of the budget.
2. Paragraph 2 of Article 120 of the Constitution
provides: "Local governments shall act freely and independently
within the limits of their competence which shall be
established by the Constitution and laws."
Paragraph 1 of Article 121 of the Constitution provides:
"Local governments shall draft and approve their own budget."
Paragraph 1 of Article 127 of the Constitution provides:
"The budgetary system of the Republic of Lithuania shall
consist of the independent State budget of the Republic of
Lithuania and the independent local governments budgets."
3. While construing the provisions of Paragraph 2 of
Article 120, Paragraph 1 of Article 121 and Paragraph 1 of
Article 127 of the Constitution pointed out by the petitioner,
one is to hold that the principle of independence of local
governments within the limits of their competence established
by the Constitution and laws is established in the
Constitution. The provision of the Constitution that local
governments shall act freely and independently within the
limits of their competence which shall be established by the
Constitution and laws is to be assessed as a guarantee of the
participation of these local communities in administration of
these territories (Constitutional Court ruling of 28 June
2001).
The Constitution does not identify self-government with
state administration. Administrative units provided by law on
state territory shall be entitled to the right of
self-government. This right shall be implemented through local
government councils (Paragraph 1 of Article 119 of the
Constitution). There is interaction between the state and local
governments as a form of self-regulation of the community.
Paragraph 1 of Article 120 of the Constitution provides that
the state shall support local governments. The Constitutional
Court has noted that the "interests of the state and local
governments must be coordinated. The principle of the
coordination of interests of the state and local governments
finds expression not only in the state support of local
governments in all ways and forms or in the state supervision
of local government activities in the manner prescribed by the
law but also in coordination of joint actions when significant
social objectives are being sought" (Constitutional Court
ruling of 18 February 1998).
4. The independence of local governments within the limits
of their competence established by the Constitution and laws
entrenched in the Constitution implies that if local
governments are transferred state functions by laws, or if they
are given duties by laws or other legal acts, funds must be
provided for the implementation of these functions (duties).
If, before the end of a budget year, local governments are
transferred additional state functions (are given duties), for
this purpose funds must be allocated also. Under the
Constitution, local governments must observe the laws, thus
also the laws whereby the local governments are obligated to
exercise the functions transferred to them by the state. The
local governments would be unable to exercise such duties
unless their implementation were not guaranteed by financial
means. The funds for the implementation of the functions
transferred by the state to local governments must be provided
for in the law on the state budget but not in the acts on the
execution of the budget.
5. The Constitution does not group the functions of local
governments into state, delegated, independent or in any other
manner. Under Paragraph 3 of Article 119 of the Constitution,
the procedure for the organisation and activities of
self-government institutions shall be established by law. It is
within the powers of the legislator to establish functions of
local governments and types of such functions. The functions of
local governments are established in the Law on Local
Self-Government and other laws.
The constitutional principle of coordination of the
interests of local governments and those of the state means
inter alia that when one establishes functions and powers of
local governments by laws, when one provides for the sources of
local governments budgets and their amount by laws, the
reasonable interests of local communities may not be ignored.
It is not permitted to ascribe such functions to local
government institutions which they would be unable to perform.
6. Under the Constitution, local governments budgets are
independent. The independence of local government budgets is an
important aspect of the constitutional principle of the
independence of local governments within the limits of their
competence established by the Constitution and laws. Alongside,
it needs to be noted that the independence of local governments
in the sphere of the budget is not absolute.
The independence of activities of local governments within
the limits of the competence established by the Constitution
and laws and the support of the state for local governments,
coordination of the interests of local governments and those of
the state, which are entrenched in the Constitution, imply that
funds (local government revenues and their sources) must be
provided for in the state budget, necessary for the ensuring of
all-sufficient functioning of self-government and for the
implementation of functions of local governments.
The provision of Paragraph 1 of Article 121 of the
Constitution that local governments shall draft and approve
their own budget means that local governments draft and approve
their own budget on their own. In the budget of a local
government, revenues and expenditures must be provided for
which are necessary to finance its functions.
7. The petitioner maintains that, under the Law on Local
Self-Government, civil registry, civil defence and
fire-prevention, health activities etc. are functions delegated
to local governments by the state.
8. While deciding whether the Law on Approving the
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) is in
compliance with Paragraph 2 of Article 120, Paragraph 1 of
Article 121 and Paragraph 1 of Article 127 of the Constitution,
it is important to ascertain whether civil registry, civil
defence and fire-prevention, health activities are state
functions which were transferred by the law to local
governments, and also whether funds were provided for their
implementation in the law on the state budget.
8.1. It needs to be noted that the Law on Local
Self-Government was being amended at the time of the
consideration of the 2001 state budget in the Seimas: at the
time when the Government submitted the draft 2001 state budget,
the 24 November 1998 wording of this law was relevant, while at
the time when the Law on Approving the Financial Indicators of
the 2001 State Budget and Budgets of Local Governments (wording
of 19 December 2000) was being adopted, the 12 October 2000
wording of the Law on Local Self-Government was relevant,
therefore in this case at issue it is important how the
aforementioned functions of local governments were treated in
both wordings (24 November 1998 and 12 October 2000) of the Law
on Local Self-Government.
8.2. Under Paragraph 1 of Article 14 of the Law on Local
Self-Government (wording of 24 November 1998), the competence
of local self-government institutions was grouped into
autonomous competence and that delegated by the state; under
Article 16 titled Competence Delegated by the State of the same
law, self-government institutions were to perform the functions
of civil registration, keep the register of local government,
state and private enterprises as well as public organisations,
implement secondary healthcare, they were permitted to
administer state parks (national and regional), organise the
municipal police, civil security and fire prevention system and
implement other functions delegated by laws.
Under Paragraph 8 of Article 3 of the Law on Local
Self-Government (wording of 12 October 2000), the functions of
local governments are functions of civil service and public
services attributed to local governments by the Law on Local
Self-Government and other laws. Paragraph 1 of Article 5 of the
said law provides that, according to the freedom of adoption of
decisions, the functions of local governments shall be grouped
into (1) autonomous ones which are performed by local
governments within the competence established by laws,
obligations before their communities and in their interests, in
the course of implementation of which the local governments
shall enjoy the freedom of initiative of decisions, that of
their adoption and implementation and shall be responsible for
the performance of these functions; (2) attributed ones
(restrictedly autonomous) which local governments, while taking
account of the local conditions and circumstances, perform in
the course of the implementation of the Law on Local
Self-Government and other laws as well as other legal acts
adopted on their basis; (3) state ones (transferred to local
governments), i.e. state functions transferred to local
governments by laws while taking account of the interests of
the population, which are implemented while following legal
acts and in the course of the implementation of which the local
governments enjoy the freedom of adoption of decisions within
the limits established by laws; (4) contractual ones the
implementation of which is based on contracts. Under Items 1,
2, 3, and 4 of Article 8 of the said law, registration of civil
status acts, keeping of the registers ascribed by laws as well
as supplying data to state registers, organisation of civil
security and municipal fire fighting services are local
government state (transferred to local governments) functions.
The local government functions delegated by the state by
the Law on Local Self-Government (wording of 24 November 1998)
pointed out by the petitioner, i.e. civil registry, civil
security and fire prevention, even though referred to
differently in the subsequent 12 October 2000 wording of the
Law on Local Self-Government, are provided for as local
government state (transferred to local governments) functions.
8.3. Paragraph 1 of Article 53 of the Constitution
provides that the state shall take care of people's health and
shall guarantee medical aid and services in the event of
sickness, while Paragraph 2 thereof provides that the procedure
for providing medical aid to citizens free of charge at state
medical facilities shall be established by law. Thus taking
care of people's health and guaranteeing medical aid and
services in the event of sickness are to be treated as a state
function. The administering and supervision of health
activities are one of the elements of the aforementioned
function. These relations are regulated by the Republic of
Lithuania Law on the Health System, under which part of the
function of administering and supervision of health activities
is transferred to local governments. The financing of the said
function must be guaranteed from the state budget.
9. Under Paragraph 7 of Article 36 of the Law on Local
Self-Government (wording of 12 October 2000), the finances for
performing state (transferred to local governments) functions
shall be allocated from either the state budget or state
financial funds and shall be transferred to local governments
as a special subsidy.
The 2001 state budget provided for certain funds for civil
registration, civil security and fire prevention, health
activities, as well as the other state functions transferred to
local governments.
The Law on Approving the Financial Indicators of the 2001
State Budget and Budgets of Local Governments (wording of 19
December 2000) does not indicate separately the funds for
registration of civil status acts, keeping of the registers
ascribed by laws as well as supplying data to state registers,
organisation of civil security and administering and
supervision of health activities carried out by local
governments.
The fact that the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) does not indicate
separately the subsidies to perform the state functions
transferred to local governments implies that this law does not
guarantee that the local governments will be able to properly
perform the functions transferred to them. Such legal
regulation is not in line with the provision of Paragraph 2 of
Article 120 of the Constitution that local governments shall
act freely and independently within the limits of their
competence which shall be established by the Constitution and
laws.
10. On the grounds of the arguments set forth one is to
draw a conclusion that the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) to the extent that it
does not indicate separately the subsidies to perform the state
functions transferred to local governments conflicts with
Paragraph 2 of Article 120 of the Constitution.
11. Having held that the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) to the extent that it
does not indicate separately the subsidies to perform the state
functions transferred to local governments conflicts with
Paragraph 2 of Article 120 of the Constitution, in this case
the Constitutional Court will not consider the compliance of
the aforesaid law with Paragraph 1 of Article 121 and Paragraph
1 of Article 127 of the Constitution.
VI
On the compliance of the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) with Paragraph 1 of
Article 69 of the Constitution.
1. In the opinion of the petitioner, the Law on Approving
the Financial Indicators of the 2001 State Budget and Budgets
of Local Governments (wording of 19 December 2000) conflicts
with Paragraph 1 of Article 69 of the Constitution.
The doubts of the petitioner are based on the following:
1) under Paragraph 2 of Article 131 of the Constitution,
expenditures established by law may not be reduced as long as
said laws are not amended. In the opinion by the petitioner,
after the disputed law had provided for smaller expenditures if
compared with those established in the Law on the State
Regulation of Economic Relations in Agriculture, the Law on
Land Reclamation and the Law on Special Education pointed out
by the petitioner, the provision of Paragraph 1 of Article 69
of the Constitution was violated;
2) under Paragraph 2 of Article 6 and Paragraph 5 of
Article 11 of the Law on the Methodology of Determination of
Local Government Budgetary Revenues, local governments may be
given a general subsidy for administration of the national
service, however, the Law on Approving the Financial Indicators
of the 2001 State Budget and Budgets of Local Governments
(wording of 19 December 2000) gave a special targeted subsidy
for administration of the national service.
2. Paragraph 1 of Article 69 of the Constitution provides:
"Laws shall be enacted in the Seimas in accordance with the
procedure established by law."
3. It needs to be noted that the provision of Paragraph 1
of Article 69 of the Constitution is related to the provision
of Article 76 of the Constitution that the structure and
procedure of activities of the Seimas shall be determined by
the Statute of the Seimas which shall have the power of law.
Determination of the procedure of activities of the Seimas
includes regulation of the procedure of legislation
(Constitutional Court ruling of 18 October 2000). The duty of
the Seimas to act in accordance with the procedure of law
enactment established by the Statute of the Seimas not only may
but, in fact, must be interpreted as a constitutional duty
because it is conditioned by the provision established in
Paragraph 1 of Article 69 of the Constitution (Constitutional
Court ruling of 8 November 1993). Construing the provision of
Paragraph 1 of Article 69 together with the provision of
Article 76 of the Constitution, the Constitutional Court has
noted that both said provisions mean that the legislation
procedure can be regulated by the Statute of the Seimas as well
as other laws (Constitutional Court ruling of 28 June 2001).
4. The petitioner does not challenge the compliance of the
Law on Approving the Financial Indicators of the 2001 State
Budget and Budgets of Local Governments (wording of 19 December
2000) with Paragraph 1 of Article 69 of the Constitution from
the aspect of enactment of laws in accordance with the
procedure established by the Statute of the Seimas.
5. It has been held in this Ruling that the Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000) is
in compliance with the provision of Paragraph 2 of Article 131
of the Constitution that expenditures established by law may
not be reduced as long as said laws are not amended, therefore
the Constitutional Court will not investigate into the
compliance of the said law with Paragraph 1 of Article 69 of
the Constitution from this aspect pointed out by the
petitioner.
6. Paragraph 2 of Article 6 of the Law on the Methodology
of Determination of Local Government Budgetary Revenues
(wording of 19 October 1999 which was relevant at the time of
the enactment of the Law on Approving the Financial Indicators
of the 2001 State Budget and Budgets of Local Governments
(wording of 19 December 2000)) provided:
"The Ministry of Finance shall calculate the expected
amount of the state budget general subsidy (D), assigned to
local governments budgets under the formula D=A-B-C, where:
1) A shall constitute the amount of expenditures expected
for the planned budget years of all local governments. The
planned budgetary expenditures of all local governments shall
be established as part of the common state and local
governments budgetary expenditures in percentages;
2) B shall constitute the expected amount of tax and non
tax-derived budgetary revenue of all the local governments for
the planned budget years. The amount of the non tax-derived
revenue is established as a fixed part of tax-derived revenue
by percentages;
3) C shall constitute the special targeted subsidies from
the state budget for the planned budget year. In order to carry
out programmes approved by the Government or the Seimas,
special targeted subsidies may be allocated to local
governments budgets."
Paragraph 5 of Article 11 of the same law provided: "If in
the course of the budget year the Seimas or the Government
adopts or plans to adopt decisions for the next budget year due
to which expenditures of local governments become changed, in
order to compensate the changes in the expenditures in the same
or subsequent year a state budget compensation of general
subsidy of corresponding amount must be allocated, which is
related to the changes in the expenditures of local governments
budgets, or corresponding sums shall be taken from local
governments budgets. The compensation sums of the state budget
general subsidy, as well as the corresponding sums taken from
local governments budgets, related to the changes in the
expenditures of local governments budgets shall be calculated
under the formula presented in Article 9."
6.1. While considering whether the Law on Approving the
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) is in
compliance with Paragraph 1 of Article 69 of the Constitution
from the aspect pointed out by the petitioner (i.e. because the
disputed law provided for a general but not a special subsidy
for local governments for administering the national service),
it is important to ascertain whether Paragraph 5 of Article 11
and Paragraph 2 of Article 6 of the Law on the Methodology of
Determination of Local Government Budgetary Revenues regulate
the relations of the procedure of legislation.
6.2. Paragraph 2 of Article 6 of the Law on the
Methodology of Determination of Local Government Budgetary
Revenues (wording of 19 October 1999) provided as to what state
institution and under what formula it calculates the expected
amount of the state budget general subsidy allocated to local
governments budgets. It also provided that in order to carry
out programmes approved by the Government or the Seimas,
special targeted subsidies may be allocated to local
governments budgets. Paragraph 5 of Article 11 of the same law
established as to the cases when compensation of state budget
general subsidy of respective amount related to the changes in
local governments budgets must be allocated in order to
compensate the changes in the expenditures of local governments
in the same or subsequent year. A reference was made therein to
the formula under which the sums of the compensation of the
state budget general subsidy, as well as the corresponding sums
taken from local governments budgets, related to the changes in
the expenditures of local governments budgets, are calculated.
Thus Paragraph 2 of Article 6 and Paragraph 5 of Article
11 of the Law on the Methodology of Determination of Local
Government Budgetary Revenues (wording of 19 October 1999)
regulate different relations but not those of legislation
procedure.
6.3. Thus, there are no grounds to assert that after the
Law on Approving the Financial Indicators of the 2001 State
Budget and Budgets of Local Governments (wording of 19 December
2000) had allocated not general but a special subsidy for
administering of the national service, the provision of
Paragraph 1 of Article 69 of the Constitution that laws shall
be enacted in the Seimas in accordance with the procedure
established by law was violated. The Law on Approving the
Financial Indicators of the 2001 State Budget and Budgets of
Local Governments (wording of 19 December 2000) is in
compliance with Paragraph 1 of Article 69 of the Constitution
from the said aspect pointed out by the petitioner.
7. On the grounds of the arguments set forth, one is to
draw a conclusion that the Law on Approving the Financial
Indicators of the 2001 State Budget and Budgets of Local
Governments (wording of 19 December 2000) is in compliance with
Paragraph 1 of Article 69 of the Constitution.
VII
On the compliance of the Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2001, 2002 and 2003 with Paragraph 1 of
Article 69, Paragraph 2 of Article 120, Paragraph 1 of Article
121, Paragraph 1 of Article 127 and the provision of Paragraph
2 of Article 131 of the Constitution that expenditures
established by law may not be reduced as long as said laws are
not amended.
1. By the Law on the Approval of Indicators Determining
the Amount and Levelling of Revenues of Local Governments
Budgets for 2000, 2001 and 2002 enacted on 23 December 1999,
the main expected indicators were established (approved) for
2001, 2002 and 2003, which determine the amount of local
governments budgets as well as their levelling.
By the Law on the Amendment of the Annex of the Law on the
Approval of Indicators Determining the Amount and Levelling of
Revenues of Local Governments Budgets for 2000, 2001 and 2002
enacted on 20 April 2000 one of the indicators, i.e. the
portions (in percentages) of the tax of revenues of natural
persons, which were expected to be allocated to the budgets of
all local governments, was amended.
By Article 4 of the Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2001, 2002 and 2003 enacted on 21
December 2000, the Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2000, 2001 and 2002 and the Law on the
Amendment of the Annex of the Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2000, 2001 and 2002 were recognised to
be voided as of 1 January 2001. The disputed Law on the
Approval of Indicators Determining the Amount and Levelling of
Revenues of Local Governments Budgets for 2001, 2002 and 2003
established different indicators determining the amount and
levelling of revenues of local governments.
Paragraph 2 of Article 3 of the 23 October 2001 Republic
of Lithuania Law on the Methodology of Determination of Local
Government Budgetary Revenues provides that the disputed Law on
the Approval of Indicators Determining the Amount and Levelling
of Revenues of Local Governments Budgets for 2001, 2002 and
2003 shall become voided as of 1 January 2002.
2. The petitioner requests to consider whether the Law on
the Approval of Indicators Determining the Amount and Levelling
of Revenues of Local Governments Budgets for 2001, 2002 and
2003 is in compliance with Paragraph 2 of Article 120,
Paragraph 1 of Article 121, Paragraph 1 of Article 127 and the
provision of Paragraph 2 of Article 131 of the Constitution
that expenditures established by law may not be reduced as long
as said laws are not amended.
The doubts of the petitioner are based on the fact that
under Article 10 of the Law on the Methodology of Determination
of Local Government Budgetary Revenues, the Government, having
considered together with the Association of Local Governments
of Lithuania the indicators determining the amount and
levelling of revenues of local governments, shall submit them
to the Seimas for approval for a three-year period. Such
indicators were approved by the Law on the Approval of
Indicators Determining the Amount and Levelling of Revenues of
Local Governments Budgets for 2000, 2001 and 2002; in the
opinion of the petitioner, under Articles 10 and 11 of the Law
on the Methodology of Determination of Local Government
Budgetary Revenues the indicators should not have been amended
before the end of the three-year period, nevertheless, by the
Law on the Approval of Indicators Determining the Amount and
Levelling of Revenues of Local Governments Budgets for 2001,
2002 and 2003 different indicators were approved for the
subsequent three-year period.
It needs to be noted that the petitioner challenges not
the indicators determining the amount and levelling of revenues
of local governments budgets but only the fact that the
indicators established by the Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2000, 2001 and 2002 were amended before
the end of the three-year period.
2.1. Paragraph 2 of Article 120 of the Constitution
provides that local governments shall act freely and
independently within the limits of their competence which shall
be established by the Constitution and laws, Paragraph 1 of
Article 121 of the Constitution provides that local governments
shall draft and approve their own budget, while Paragraph of
Article 127 of the Constitution stipulates that the budgetary
system of the Republic of Lithuania shall consist of the
independent state budget of the Republic of Lithuania and the
independent local governments budgets.
2.1.1. While considering whether the Law on the Approval
of Indicators Determining the Amount and Levelling of Revenues
of Local Governments Budgets for 2001, 2002 and 2003 is in
compliance with Paragraph 2 of Article 120, Paragraph 1 of
Article 121, and Paragraph 1 of Article 127 of the
Constitution, it is important to ascertain whether the Seimas,
when establishing new indicators determining the amount and
levelling of revenues of local governments budgets, was bound,
under the Constitution, by the circumstance, that the
indicators determining the amount and levelling of revenues of
local governments budgets had already been established by the
previous law.
2.1.2. By the Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2001, 2002 and 2003 the main expected
indicators determining the amount and levelling of revenues of
local governments budgets were established. The establishment
of the said indicators is not identical with the provision for
funds from the state budget to be allocated to local
governments.
It does not follow from the provisions of Paragraph 2 of
Article 120, Paragraph 1 of Article 121, and Paragraph 1 of
Article 127 of the Constitution and the length of the budget
year defined in the Constitution that it is permitted to
establish by law the indicators determining the amount and
levelling of revenues of local governments budgets for one
budget year only-they may be established for a longer period
than one year.
It also does not follow from the provisions of Paragraph 2
of Article 120, Paragraph 1 of Article 121, and Paragraph 1 of
Article 127 of the Constitution and the length of the budget
year defined in the Constitution that the legislator, while
taking account of the economic or social situation, the needs
and possibilities of the state and the society, the available
or potential financial resources and the liabilities of the
state and other important factors, may not, before the end of
the time period for which certain indicators have been
established, establish new indicators replacing the former
ones.
In themselves, the establishment of the new indicators
determining the amount and levelling of revenues of local
governments budgets before the end of the time period for which
certain indicators have been established do not imply that the
independence of local governments in the sphere of their
drafting and approving their budgets is violated.
While establishing the indicators determining the amount
and levelling of revenues of local governments budgets by the
Law on the Approval of Indicators Determining the Amount and
Levelling of Revenues of Local Governments Budgets for 2001,
2002 and 2003, one did not interfere with the independence of
local governments in the sphere of the budget which is
established in the Constitution, and the provisions of
Paragraph 2 of Article 120, Paragraph 1 of Article 121, and
Paragraph 1 of Article 127 of the Constitution were not
violated.
2.1.3. On the grounds of the arguments set forth, one is
to draw a conclusion that the Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2001, 2002 and 2003 is in compliance
with Paragraph 2 of Article 120, Paragraph 1 of Article 121,
and Paragraph 1 of Article 127 of the Constitution.
2.2. Under Paragraph 2 of Article 131 of the Constitution,
expenditures established by law may not be reduced as long as
said laws are not amended.
2.2.1. While deciding whether the disputed Law on the
Approval of Indicators Determining the Amount and Levelling of
Revenues of Local Governments Budgets for 2001, 2002 and 2003
is in compliance with the articles of the Constitution pointed
out by the petitioner, it is important to ascertain whether the
Law on the Approval of Indicators Determining the Amount and
Levelling of Revenues of Local Governments Budgets for 2000,
2001 and 2002 established any expenditures which subsequently
were reduced by the disputed Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2001, 2002 and 2003, as well as whether
the Seimas was not bound and was permitted, under Article 10
and Paragraph 2 of Article 11 of the Law on the Methodology of
Determination of Local Government Budgetary Revenues, to amend
the earlier established indicators determining the amount and
levelling of revenues of local governments budgets before the
end of the three-year period.
2.2.2. The funds (revenues and their sources) for local
governments are provided for in the state budget. While
providing for such funds in the state budget, the Seimas is
bound by the laws that it has adopted, including those defining
as to how the funds of the state budget for local governments
are calculated, under what procedure they are allocated, the
manner of planning for local governments budgets of tax-derived
revenues and portions of taxes established by laws etc.
The Law on the Approval of Indicators Determining the
Amount and Levelling of Revenues of Local Governments Budgets
for 2000, 2001 and 2002 did not provide for any expenditures.
2.2.3. Article 10 of the Law on the Methodology of
Determination of Local Government Budgetary Revenues (wording
of 19 October 1999), which was in force at the time of the
enactment of the disputed law, provided that the Government,
having considered together with the Association of Local
Governments of Lithuania the indicators determining the amount
and levelling of revenues of local governments, shall submit
them to the Seimas for approval for a three-year period; the
said indicators were listed.
Paragraph 2 of Article 11 of the same law established
which actually received funds are monthly allocated to local
governments and under what formulas they are calculated.
The aforementioned articles (paragraphs thereof) of the
Law on the Methodology of Determination of Local Government
Budgetary Revenues do not contain any provisions which bind the
Seimas so that it might not amend the earlier established
indicators determining the amount and levelling of revenues of
local governments budgets before the end of the three-year
period.
2.3. On the grounds of the arguments set forth, one is to
draw a conclusion that the Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2001, 2002 and 2003 is in compliance
with the provision of Paragraph 2 of Article 131 of the
Constitution that expenditures established by law may not be
reduced as long as said laws are not amended.
3. The petitioner challenges the compliance of the Law on
the Approval of Indicators Determining the Amount and Levelling
of Revenues of Local Governments Budgets for 2001, 2002 and
2003 with Paragraph 1 of Article 69 of the Constitution.
The doubts of the petitioner are based on the fact that in
the course of the enactment of the disputed law, in his
opinion, the then in force Law on the Approval of Indicators
Determining the Amount and Levelling of Revenues of Local
Governments Budgets for 2000, 2001 and 2002 and Article 10 and
Paragraph 2 of Article 11 of the Law on the Methodology of
Determination of Local Government Budgetary Revenues (wording
of 19 October 1999) were violated.
3.1. Paragraph 1 of Article 69 of the Constitution
provides: "Laws shall be enacted in the Seimas in accordance
with the procedure established by law."
It has been mentioned that both the provision of Paragraph
1 of Article 69 of the Constitution and the provision of
Article 76 of the Constitution that the structure and procedure
of activities of the Seimas shall be determined by the Statute
of the Seimas which shall have the power of law mean that the
legislation procedure can be regulated by the Statute of the
Seimas as well as other laws.
3.2. While deciding whether of the Law on the Approval of
Indicators Determining the Amount and Levelling of Revenues of
Local Governments Budgets for 2001, 2002 and 2003 is in
compliance with Paragraph 1 of Article 69 of the Constitution,
it needs to be noted that the petitioner does not challenge the
compliance of this law with Paragraph 1 of Article 69 of the
Constitution from the aspect concerning enactment of laws in
accordance with the procedure established in the Statute of the
Seimas.
3.3. It also needs to be noted that the Law on the
Approval of Indicators Determining the Amount and Levelling of
Revenues of Local Governments Budgets for 2000, 2001 and 2002
which had been in force until then regulated other but not
relations of legislation procedure. Therefore there are no
grounds to assert that in the course of the enactment of the
Law on the Approval of Indicators Determining the Amount and
Levelling of Revenues of Local Governments Budgets for 2001,
2002 and 2003 Paragraph 1 of Article 69 of the Constitution was
violated from this aspect pointed out by the petitioner.
3.4. Under Article 10 of the Law on the Methodology of
Determination of Local Government Budgetary Revenues (wording
of 19 October 1999), the Government, having considered together
with the Association of Local Governments of Lithuania the
indicators determining the amount and levelling of revenues of
local governments, had to submit them to the Seimas for
approval for a three-year period.
It is clear from the case material that the Government had
considered these issues with the Association of Local
Governments of Lithuania. In the course of the enactment of the
Law on the Approval of Indicators Determining the Amount and
Levelling of Revenues of Local Governments Budgets for 2001,
2002 and 2003 Paragraph 1 of Article 69 of the Constitution was
not violated from this aspect, either.
3.5. On the grounds of the arguments set forth, one is to
conclude that the Law on the Approval of Indicators Determining
the Amount and Levelling of Revenues of Local Governments
Budgets for 2001, 2002 and 2003 is in compliance with Paragraph
1 of Article 69 of the Constitution.
Conforming to Article 102 of the Constitution of the
Republic of Lithuania and Articles 53, 54, 55 and 56 of the
Republic of Lithuania Law on the Constitutional Court, the
Constitutional Court of the Republic of Lithuania has passed
the following
ruling:
1. To recognise that the Republic of Lithuania Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000) to
the extent that it does not specify allocations for each state
higher school separately conflicts with Paragraph 3 of Article
40 of the Constitution of the Republic of Lithuania and the
principle of separation of powers entrenched in the
Constitution of the Republic of Lithuania.
2. To recognise that the Republic of Lithuania Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000) to
the extent that it does not point out allocations according to
the targeted purpose for the work to be performed in the sphere
of land reclamation conflicts with the principle of a
law-governed state entrenched in the Constitution of the
Republic of Lithuania.
3. To recognise that the Republic of Lithuania Law on
Approving the Financial Indicators of the 2001 State Budget and
Budgets of Local Governments (wording of 19 December 2000) to
the extent that it does not indicate separately the allocations
to perform the state functions transferred to local governments
conflicts with Paragraph 2 of Article 120 of the Constitution
of the Republic of Lithuania.
4. To recognise that the Republic of Lithuania Law on the
Approval of Indicators Determining the Amount and Levelling of
Revenues of Local Governments Budgets for 2001, 2002 and 2003
is in compliance with the Constitution of the Republic of
Lithuania.
5. To recognise that Article 16 of the Republic of
Lithuania Law on the State Regulation of Economic Relations in
Agriculture conflicts with Article 129 of the Constitution of
the Republic of Lithuania and the provision of Paragraph 2 of
Article 131 of the Constitution of the Republic of Lithuania
that expenditures established by law may not be reduced as long
as said laws are not amended.
This Constitutional Court ruling is final and not subject
to appeal.
The ruling is promulgated on behalf of the Republic of
Lithuania.