«Not enough money to survive until the end of the year»: Mykolaiv budget for 2026 does not cover 21.5% of protected expenditures

Mykolaiv City Council, photo: Vladyslav Kazmin

The mayor of Mykolaiv, Oleksandr Sienkevych, has said that the city's forecast budget revenues for 2026 do not allow financing 21.5% of protected and priority expenditures.

This became known today, 29 December, during a meeting of the Standing Committee on Economic and Investment Policy, according to NikVesti.

According to him, to raise the average salary of employees to 25 thousand hryvnias, the city needs 6 billion 605 million 404 thousand 558 hryvnias a year. If salaries are kept at the level of 2025, 263 million 5 thousand 925 hryvnias less is needed — 6 billion 342 million 398 thousand 633 hryvnias. At the same time, the projected budget revenues of Mykolaiv for the next year are only 5 billion 196 million hryvnias, which means that even if the current level of salaries is maintained, there is not enough money.

«What does this mean? This means that even with all the actions we can take to reduce and equalise salaries, the total amount is still insufficient. To bring it up to the level of projected revenues, only 78.5% of the reduced payroll can be used. That is, today, the amount proposed for consideration by the Budget Committee actually covers 78.5% of the protected and priority expenditures for the next year,» explained Oleksandr Sienkevych.

Meeting of the Standing Committee on Economic and Investment Policy, screenshot from the broadcast

The budgeting process «will not end tomorrow»

The mayor explained that the city cannot cut part of the energy supply costs, as the amount of compensation for the difference between the heat tariff and its production is determined by the Budget Code and amounts to 4% of personal income tax. According to him, next year these funds should be distributed between power and heat generating companies, such as the utility company «Mykolaivoblteploenergo», Mykolaiv CHP and «Zoria»-«Mashproekt».

In addition, according to him, it is necessary to reduce utility consumption by 20%.

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«If we are talking about the utility company «Mykolaivvodokanal», then in the draft budget that was originally laid down, we provided 750 million hryvnias so that the company could survive next year, taking into account the increase in electricity tariffs and other costs. At the same time, if we take into account that we are not giving the full amount, but taking into account the 21.5% reduction, the actual amount will be 588 million hryvnias. This means that the company will have to optimise its operations further. In addition, it will have to reduce utility consumption. In fact, this means cutting them by about 20%. If we do not receive an additional subsidy, we may have to reduce the number of employees, but this will not lead to significant savings,» said Oleksandr Sienkevych.

According to him, today they will prepare an appeal to the Verkhovna Rada of Ukraine, the Cabinet of Ministers and the President to request an additional subvention.

«Today we will prepare an appeal to the Verkhovna Rada, the Cabinet of Ministers and the President to provide an additional subvention. After taxes on military personnel's salaries were taken away from us, the city lost not only the additional funds it had before the war due to the increase in their salaries, but also the money that had been coming in before. Prior to the full-scale invasion, personal income tax on military salaries accounted for 26% of all personal income tax received in Mykolaiv. The number of people has not decreased, the volume of services has remained the same, heating and water supply have not been reduced, but all this needs to be maintained, while revenues have significantly decreased,» added Sienkevych.

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Oleksandr Sienkevych added that he and the commission will have to make new decisions on the budget and redistributions almost every month, so the budgeting process «will not end tomorrow».

«Large taxpayers have stopped working, people have stopped receiving salaries and paying personal income tax. Therefore, while some cities can afford free transport or the abolition of land or property taxes, we cannot afford it. We simply don't have enough money to survive until the end of the year, let alone implement any special programmes,» summed up Oleksandr Sienkevych.

Meeting of the Standing Committee on Economic and Investment Policy, screenshot from the broadcast

All budget payments in Mykolaiv suspended due to lack of funds for salaries and utility bills: what is known

As a reminder, on 19 December 2024, the deputies of the Mykolaiv City Council approved the city budget for 2025. The total budget envisaged revenues of 5.414 billion hryvnias and expenditures of 5.285 billion hryvnias.

At that time, salary expenses for employees of executive bodies and budgetary institutions accounted for 38% of the total budget of Mykolaiv in 2025. The main source of budget revenues is income taxes paid by the residents of Mykolaiv.

In September 2025, Fedir Panchenko, a member of the Mykolaiv City Council and chairman of the planning and budget commission, warned of a shortage of funds in the city's budget for mandatory payments by the end of the year. At the time, he announced a figure of 200 million hryvnias.

He also spoke about this at a meeting of the City Council's budget committee on the same day when considering the decision to reallocate the city's budget. Back then, he said that it was necessary to look for money for protected items for November and December.

Subsequently, in early November, the main spending units and municipal enterprises of Mykolaiv were instructed to suspend all payments for expenditures that did not relate to protected items, namely public sector salaries and utility bills.

At the time, it was reported that the reason for this was the lack of budget funds to cover the protected budget items until the end of the year. The problem had been known for a long time, as the annual budget had not included funds for mandatory payments by the end of the year. The mayor's office hoped that budget overruns and savings during the year would help find the funds. However, this did not happen.

Later, Mykolaiv Mayor Oleksandr Sienkevych said that the city budget was looking for 60 million hryvnias for salaries and utilities.

NikVesti analysed the proposed changes to the distribution of expenditures in Mykolaiv' s budget and calculated that 7.2 million hryvnias would be allocated for salaries and utility bills (in the budget, this is an expenditure item «Management and administration in the relevant area») for the city's budget managers, rather than the 60 million hryvnias previously mentioned by the mayor.

Recently, Andrii Yantar, a member of the Mykolaiv City Council , proposed to equalise the salaries of employees of the city's departments and utilities with the average salary in Mykolaiv in 2025.

According to him, it is worth establishing «a unified approach to calculating salaries». In addition, the maximum salary should not exceed this level.

It is worth noting that in the 2026 budget of Mykolaiv, 4.5 million hryvnias is to be allocated for the Development Agency, of which about 3.4 million hryvnias is to be spent on salaries and accruals.

Subsequently, four members of the Mykolaiv City Council appealed to Mayor Oleksandr Sienkevych to intervene in the situation around the preparation of the Mykolaiv budget for 2026. In their opinion, the procedure for drafting and reviewing the city's main financial document was violated.

Appeal of the deputies to the mayor of Mykolaiv dated 26 December, the document was provided to the editorial office NikVesti

Appeal of the deputies to the mayor of Mykolaiv dated 26 December, provided to the editorial office NikVesti

The document states that there are discrepancies between the reports of the main spending units and utilities on protected and necessary expenditures for 2026 and the draft decision «On the Budget of the Mykolaiv City Territorial Community for 2026» in terms of indicators and funding.