Introduction
Estonia is a unitary republican State under the Constitution of 1992. Estonia has a single‑chamber Parliament (Riigikogu), which is composed of 101 directly elected members. The Constitution instituted the Republic of Estonia as a democratic parliamentary representative State (Articles 1, 65.3, 65.5, 97 of the Constitution).
Local self-government is a right guaranteed by the Constitution, which states that all local matters are determined and administered by local authorities, who discharge their duties autonomously in accordance with the law (Article 154). The State is composed of 79 local authorities including 64 rural municipalities (vald) and 15 urban municipalities (linn).
In July, 2016, the Administrative Reform Act was passed, which determined all local government units must have a territorial organisation of at least 5,000 residents. Until the end of 2016, local government units that did not fulfil this criterion could negotiate a merger at their own initiative and were provided financial incentives for that. After that, the Government was in the position to initiate mergers. 26 local government units did not fulfil the criteria in the beginning of 2017. The reform was planned to be concluded by local elections in October 2017, which was the case. The aim of the reform was to increase the capabilities of local government units, the municipalities, and to ensure a more consistent regional development as outlined in Article 1 of the Administrative Reform Act. The Act did not envisage changes to policy areas and the competencies of local government.
As a result of the reform, there are 11 types of territorial pattern that emerged. For example, two municipalities operate after the reform in the borders of counties. In addition to urban municipalities (cities), there are 32 towns within rural municipalities, which do not constitute separate local government units. Among the 15 urban municipalities, 10 cities comprise of one urban settlement while 5 cities comprise of an urban centre and rural settlements.
As of January 2020, the smallest municipality in Estonia, Ruhnu, has 131 inhabitants, whereas the largest, Tallinn, has approximately 438,000.
Municipalities are the only level of self-government, as counties (maakonnad – there are 15 of them) became a devolved level of central government. They are state administrative units (not local governments) without separately elected representative bodies or any other significant independent competence. There is no regional level of government. The county governments along with county governors were abolished with the 2017 administrative‑territorial reform, and their tasks were transferred to ministries, other government bodies or municipalities from 1 January 2018. Government bodies each can develop their own territorial structure, which does not have to follow the territorial structure of other bodies or the number of counties. With that change, the territorial administration was essentially abolished as the counties have lost their significance and operate mostly as the lowest co-operation level of municipalities.
The legislative power is vested in the Riigikogu (article 59 of the Constitution). The basic functions of local authorities are the independent organisation and management of local issues in pursuance of law and on the basis of the legitimate needs and interests of the residents of the rural municipality or city.
Apart from the Constitution of 1992, the major legislative texts relevant to division of powers are:
According to the Ministry of Finance, in 2018, the revenue of the sub-national public sector reached to EUR 2,059 million, representing 7.9% of the country's GDP and 20.3% of total public sector revenue (EUR 10,162 million). More than half of the total income of cities and rural municipalities consists of the personal income tax paid by their residents (paid at the rate of 20%, which is divided between the central government and local governments, local governments receiving 11.93% of the gross revenue of residents (2019); local governments received more than 1,100 million euros from personal income tax in 2018). Land tax, the rate of which can be determined by the local authorities within the established limits, is paid fully to local budgets, but its amount is considerably smaller (ca 57 million euros in total in 2018).
In addition to national taxes, a local government may establish local taxes within its territory (such as advertising tax and parking charges), but their share in the consolidated budgets of local governments has been very small to date (up to 1%). In 2018, 33% of the revenue came from State grants. There is an equalisation fund which is designed to harmonise the budgetary opportunities of municipalities with different revenue levels (the equalisation fund in the budget for 2019 being 102 million euros). Overall, the overwhelming part of local government revenues depend on the state.
Central level
State responsibilities
The legislative power rests exclusively with Riigikogu (Parliament).
The central government has general administrative powers in the following areas of national sovereignty: justice, foreign affairs, national defence, and tax collection. It also has supervisory powers.
Moreover, it is responsible for:
- Maintenance of public order, rescue services;
- Infrastructure development and maintenance;
- Industry and commerce;
- Education;
- Labour policy;
- Health management;
- Motorways.
Regional level
County level responsibilities
Although there are counties, there is no regional level government. There are regional agencies that exercise centrally managed policies at the regional level and provide co-ordination in some areas. The competencies of regional level government units are very limited and will be reflected accordingly in the policy areas outlined in this document.
As mentioned earlier, the county governors and county governments were abolished by the Act Amending the Government of the Republic Act and Other Acts Regarding the Abolishment of County Governments from 2017 (available only in Estonian). Consequently, their tasks were handed over to local government or state administration bodies.
More specifically,
1.1) the whole range of civil registration-related tasks were handed over to county-centered local government units (16 of them). The rest of the municipalities keep limited authority in this area, such as registering births and domicile, or issuing civil documents.
1.2) the Ministry of the Interior was handed over administrative supervision, archiving of civil documents, keeping of population registry, data inputting related to population registry-based census and some other tasks;
2) the State Shared Services Centre were handed over issues related to administration of land-related benefits, such as termination of mortgage or granting a right to split a land plot;
3) tasks related to land reform and other land-related activities were handed over to the Land Board;
4) internal-to-counties public transportation management was handed over to Joint Public Transportation Centres of local governments (mostly county-based);
5) supervision over county level bus transportation was handed over to the Road Administration;
6) interior ship and aerial line management was handed over to Road Administration;
7) social protection area tasks were handed over to Social Insurance Board (such as issuance of licenses, supervision, statistics) or local government units who are supported by the Child Protection Department of the SSB;
8) education-related tasks were handed over to the Ministry of Education and Science (e.g. supervision over education institutions), Foundation Innove[1] (e.g. management of state exams and international studies, such as PISA or IELS) or municipal associations (such as organisation of county-level education events);
9) planning of county development, health promotion and organisation of cultural events was handed over to County Unions of Municipality Governments (13) or County Development Centres (15) and in two cases – where the county and local government borders coincide – to local governments;
10) co-ordination of interior regional development programmes was handed over to the Ministry of Finance, local government units and some municipal associations;
11) supervision over local acts was handed over to the Ministry of Justice;
12) county special and thematic planning and supervision over general and zoning planning was handed over to the Ministry of Finance;
13) consultation of local government units was handed over to the Ministry of Finance;
14) supervision over compensation and restitution of property was handed over to the MoF;
15) youth policy-related tasks were handed over to the Estonian Youth Work Centre;
16) county library management was handed over to the Ministry of Culture;
17) organisation of elections to municipal registrars;
18) exercising of ownership rights in Land Improvement Associations was handed over to the Ministry of the Environment or Land Board;
19) imposition of quarantine to the Veterinary and Food Board;
20) property transfer of forest and agrarian land to third persons to local government units;
21) island ranger's tasks to municipal associations.
Local level
Municipal level responsibilities
Under the Constitution, all local issues are dealt with and resolved by self-governing territorial authorities unless assigned to other persons by law. These authorities operate their own budgets. Local authorities are responsible for:
- Education (nursery, primary, and secondary levels);
- Upkeep of public areas;
- Social welfare and services;
- Welfare services for the elderly;
- Youth work;
- Provision of public services and amenities;
- Housing and utilities;
- Water supply and sewer maintenance;
- Local planning;
- Maintenance of local public roads;
- Local public transport;
- Municipal libraries and museums;
- Sports and leisure facilities.
[1] Foundation Innove is an education competence centre which promotes general and vocational education in Estonia established by the state.
