​Introduction

Bulgaria is a parliamentary democracy and a Member State of the European Union since 2007. The Bulgarian Parliament is unicameral and comprises the National Assembly (Narodno Sabranie, Народно събрание) which consists of 240 directly elected Deputies. The President of Bulgaria is also directly elected by the people.

Bulgaria is a unitary republican State. The constitution recognises the principle of local self-government (Articles 135-146 ). The Republic comprises three levels of governance: central, districts and municipalities. Districts mainly have statistical and administrative functions. The process of decentralisation at the municipal level started as early as the 1990s with the Local Self-Government and Local Administration Act; since then, municipalities have acquired administrative competences complemented by some financial autonomy in 2002.

Bulgaria is currently composed of two NUTS-1 regions, six NUTS-2 level planning regions, 28 districts (NUTS-3) and 265 municipalities. Note: The English version of the Constitution of Bulgaria translates both NUTS-2 and NUTS-3 levels as regions, thus the term district appears only once in the translation.

On 28 February 2020 the Parliament adopted the Law on Amendment and Supplement to the Regional Development Act (Закон за изменение и допълнение на Закона за регионалното развитие). The aims are to reduce the number of strategic documents; to improve and simplifie the process for monitoring, control and evaluation of strategic documents for regional development; to reduce the administrative burden, and volume of information collected and processed for the purposes of regional and spatial development; to introduce an information platform for the purposes of regional policy. The changes are predominantly aimed at the better management of operational programmes. 

Administrative Districts (oblasti) also known as 'lower-level regions' are devolved divisions of the central Government and are not directly elected. The Municipality (obshtini) constitutes the only level at which self-government is exercised. Bulgaria is a highly centralised State, as the national Council of Ministers directly appoints district governors and all districts are fully dependent on the State's budget, whereas Municipalities are less dependent on the State's budget. The State authorities and their territorial sub-divisions exercise a control of legality over the acts of local government units (Article 144, Constitution of the Republic of Bulgaria).

Besides the Constitution of 1991, the Local Self-Government and Local Administration Act, the Municipal Property Act and some other Acts describe the competences attributed to the Municipalities. The Administration Act (amended in 2014) describes the bodies of local self-government.

The Public Finance Act was amended in both 2016 and 2017. In 2016 a new chapter VIII–A 'Municipalities with financial difficulties provided incentives to increase existing local taxes and created the basis for increased political dependence through non-interest-bearing loans.

The share of municipal budgets in GDP (consolidated level) was 9.2% in 2015 and 6.2% in 2016, including EU funds. According to the National Association of Municipalities in the Republic of Bulgaria (NAMRB), the share of the municipal budgets in the national public revenue was 15% and 16.01% in 2015 and 2016, respectively. This is below the EU average of 25%. Municipal budgets remain highly dependent on transfers from the central government. About 2/3 of municipal budget revenues come from such transfers, while capital expenditures are almost entirely dependent on EU funds. The remainder of the municipal tax revenues (EUR 438 million / BGN 876 million for 2016) are the tax on real estate (EUR 153 million / BGN 306 million leva), vehicle tax (EUR 140.5 million / BGN 281 million leva) and the tax for the acquisition of property (EUR 126.5 million / BGN 253 million). In 2016 Non – tax revenues (EUR 500,600 per annum/ BGN 1.2 billion per annum) were dominated by the municipal waste tax (EUR 276.5 million / BGN 553 million), followed by revenues and income from municipal property (EUR 130 million / BGN 260 million).

Latest reforms at the municipal level include financial equalization of municipalities to ensure that a minimum level of local services is provided to the population in every municipality, and maintaining a system of indicators for monitoring and analysis of the budgetary process in the municipalities. Proposals referring to the districts predict : integrated planning and concentration of resources to the specific needs of the regions; effective interaction of regional development policy, sector policy and planning; wider publicity, transparency and accountability in the implementation of the policies and investments; and strengthening the role of regional and district development Councils.

On 11 April 2019 the Parliament adopted at first reading the Draft Law Amending and Supplementing the Law on Local Self-Government and Local Administration. The amendments, introduced by the Ministry of Finance, are aimed at improving the existing framework regulating the powers of municipal councils, mayors of municipalities and mayors of mayoralties in the process compilation and implementation of municipal budgets. The proposed law foresees that the municipal council shall approve the precise breakdown of the expenditures of the mayoralties within the general budget of the municipality. Fiscal decentralisation is not covered by these amendments, which seem to refer more to the monitoring of expenditure than to its division among levels of government.

Central level

The central level has legislative power in all areas (Article 62 of the Constitution delegates this power to the National Assembly). 

Moreover, the central level carries out State policy, manages the State budget and maintains law and order.

​Regional level

 The region is an administrative territorial unit for the conduct of a regional policy, the implementation of state governance on a local level, and the ensuring the concurrance of national and local interests (Constitution, Art. 142).

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Local level
 

​According to the  Local Government and Local Administration Act (Article 17), the local government shall be expressed in the right and real possibility for the citizens and the bodies elected by them to decide independently all issues of local importance which has been vested by the law to their competence in the sphere of: 

• the municipal property, the municipal enterprises, the municipal finance, taxes and fees, the municipal administration;
  
• the structure and the development of the territory of the municipality and of the settlements in it;
  
• the education;
  
• the health care;
  
• culture;
  
• public works and communal activities;
  
• the social support;
  
• protection of environment and rational use of the natural resources;
• the maintenance and the preservation of cultural, historic and architectural monuments;
• the development of sports, recreation and tourism;
• disaster protection.