Yerevan’s 2024 budget expenditures have been underspent, affecting both operational and capital spending, according to a report by the Luys Foundation.

The study highlights legislative changes aimed at increasing municipal revenues, which sparked public backlash. Local taxes and fees—such as parking charges and administrative service fees—were significantly raised. However, Yerevan’s actual revenue for 2024 reached only 116.7 billion drams, a modest 1.6% increase from the previous year and 6.4% below the approved budget target.

The revenue increase was driven solely by “taxes and duties,” while “official grants” and “other revenues” declined, restraining overall budget growth.

Local duties, the largest component of municipal taxes, rose 4.1 times, while property taxes increased by 39.3%, due to a new property tax calculation method that expanded the tax base by 42.9% compared to 2023.

A 79.1% increase in local fees stemmed mainly from higher parking charges.

Despite these revenue hikes, municipal income grew by only 8.3 billion drams, falling short of budget planning expectations.

Yerevan’s budget expenditures in 2024 totaled 113.7 billion drams, just 2.3% higher than in 2023 but 5.5% lower than the adjusted budget plan and 9.0% below the approved budget target.

Both operational and capital expenditures were underperformed.

Spending on bonuses, monetary incentives, and special payments doubled compared to 2023.

Several critical projects were not implemented as planned, including:

• Project design works
• Bridge restoration and maintenance
• Street maintenance and operation
• Urban lighting
• Metro infrastructure development
• Preschool facility construction and renovation

Two programs stand out for their public significance:

Despite government assurances, no funds were spent on the construction of Ajapnyak metro station in 2024.

The preschool construction and renovation program was completed by only 35.0%, despite being a government priority.

The 2024 budget closed with a 3.0 billion-dram surplus, contrary to the revised plan, which projected a 7.1 billion-dram deficit. As in 2023, the budget deficit was artificially inflated, ultimately resulting in a revenue surplus, the report concludes.

According to the Luys Foundation, these findings indicate that municipal authorities still struggle with effective budget planning.