Judgment: The norm on the annual increase of funding for state higher education institutions does not comply with the Satversme – Education & Career

The norm of the law, which determines the annual increase of state budget funding for studies in state-founded higher education institutions, does not comply with the Satversme, the Constitutional Court (ST) has ruled in a case concerning the amount of funding for studies in state-founded higher education institutions.

Amendments to the Law on Higher Education Institutions, which stipulates an annual increase in state budget funding for studies in state-founded higher education institutions, entered into force on 1 July 2013, but it has never been complied with. ST concluded that the adoption of such a norm from the very beginning was an “empty promise to the voters”.

LETA informed that ST was approached by 31 deputies of the Saeima from the opposition “Sobežas”, the Greens and Farmers’ Union faction and a group of non-factioned deputies who considered that the Cabinet of Ministers had not taken into account Article 78 7 of the Law on Higher Education Institutions. the part which provided for an annual increase in funding for studies in state – founded higher education institutions of not less than 0.25% of the gross domestic product (GDP) until the state funding allocated for studies in state – founded higher education institutions reaches at least 2% of GDP.

The deputies considered that by failing to comply with the requirements of Section 78, Paragraph seven of the Law on Higher Education Institutions, the 2019 budget law contradicts the principle of rule of law, legal certainty and good legislation, as well as the principle of sustainability arising from Articles 1 and 66 of the Satversme.

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In its turn, ST concluded that Article 78 (7) of the Law on Higher Education Institutions does not comply with Article 1 and the first sentence of Article 66 of the Satversme, as this regulation envisaged actually transferring budgeting from the first sentence.

Article 1 of the Satversme stipulates that “Latvia is an independent democratic republic”, but the first sentence of Article 66 states that “the Saeima annually before the beginning of the financial year decides on the state revenue and expenditure budget, the draft of which is submitted to it by the Cabinet of Ministers”.

ST points out that the principle of a state under the rule of law requires every state institution to act genuinely, but the adoption of such a norm of the Law on Higher Education was an “empty promise to voters” from the very beginning, as this norm could not be covered by .

“Such actions also endanger the foundations of the democratic system of the state protected by the Satversme,” ST stated.

The Judgment noted that the Saeima and several summoned persons have indicated that compliance with the specific part of the Law on Higher Education Institutions was not possible, because the requirements specified in this norm were contrary to the state’s financial possibilities and the need for a balanced state budget.

ST emphasizes that the text of Article 66 of the Satversme also reveals several constitutional principles of state budget law, including the principle of completeness of the state budget. Article 66 of the Satversme requires that all expected state revenues and planned expenditures be reflected in the state budget. The Saeima can evaluate the revenue forecast proposed by the government and decide whether it is real.

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Thus, the principle of truthfulness of the state budget prohibits the preparer of the state budget – the Cabinet of Ministers, as well as the approver – the Saeima – to deliberately include in the budget such planned revenues and estimated expenditures based on obviously erroneous forecasts or calculations.

The Court notes that Section 78 (7) of the Law on Higher Education Institutions required the government to provide a certain amount of funding each year and an increase to cover the expenditure of public higher education institutions in relation to GDP. Such a requirement significantly limits the government’s competence and ability to draw up an economically balanced state budget.

Thus, Section 78, Paragraph 7 of the Law on Higher Education Institutions does not comply with Section 1 and the first sentence of Section 66 of the Satversme, indicates ST.

The judgment is final and not subject to appeal and shall enter into force at the time of its delivery.

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