Tallinn to reduce investments in new budget strategy
According to Tallinn's four-year budget strategy, the city will spend less on investments; however, major street construction projects, the purchase of new trams, trolleybuses and buses, the development of new tramlines and the construction of new kindergartens are still planned.
According to the budget strategy, Tallinn's investment spending is expected to decrease over the coming years. While just over €200 million was spent on investments last year and this year's forecast is €237 million, the projection for next year drops to €157 million. At no point during the strategy period does the investment budget rise above €200 million, according to the explanatory memorandum.
Among the city's education investments are the completion of extensions to Tallinn Secondary Science School (Reaalkool) and Westholm High School, the renovation of the old Hiiu School building and the construction of a new building for the Kullo hobby center. Construction will also begin on new buildings for Tallinn Helen School and Nõmme Basic School, as well as the new Martsa Basic School.
New kindergartens are planned in the Pikaliiva neighborhood, on Veerenni tänav, Paasiku tänav, and Lepiku tee, as well as in the Manufaktuuri and Hipodroom residential quarters.
In the field of sports, renovations will continue at Kadriorg Stadium and progress will be made on the construction of a new swimming facility on Varraku tänav in Lasnamäe.
Design work for the major hospital project will continue and two new social housing buildings will be constructed on Vasari and Alasi streets.
Investments in mobility — including public transportation, streets and bicycle infrastructure — will range between €37 million and €56 million during the strategy period (down from €72.5 million last year), with only one year, 2028, seeing an increase to €70 million.
Key street reconstruction projects include the main street project, Peterburi tee, Liivalaia, Suur-Ameerika and Endla streets; in addition, Tulika tänav, Linnu tee and Rahumäe tee are also on the list.
With the help of external funding, construction will begin on the Pelguranna tramline, tram tracks along Liivalaia and Suur-Ameerika streets, new bicycle paths and the Kristiine junction project.
Planned bike path developments include a connection between Lasnamäe and the city center, a bike lane on Tehnika tänav, a pedestrian and bike path linking Põhja-Tallinn with the city center and underpasses beneath the railway on Endla and Kantsi streets.
The operating result is set to increase each year
Tallinn's operating result is forecast to be in the black by €81.4 million this year, rising to €150 million by 2029. The city aims to use its positive operating balance to cover loan-related costs and help finance investments.
During the strategy period — 2026 through 2029 — the city's operating revenues are expected to grow by a total of 14 percent, while operating expenses are projected to increase by 8.5 percent.
At the end of last year, Tallinn's debt stood at €310 million. By 2029, that figure is expected to rise to €565 million due to financing needs. The city's net debt burden was 28.7 percent last year and is projected to rise to 45.6 percent by the end of 2029.
The city's budget revenue came in just under €1.1 billion last year and is expected to remain at roughly the same level this year. In the following years, however, revenues are projected to grow steadily, reaching €1.24 billion by 2029.
The city maintains a principle that the growth in operating expenses must remain below the rate of revenue growth. Last year, expenses totaled just under €1 billion; by 2029, they are forecast to reach €1.1 billion.
To ensure cost-efficiency, the city plans to streamline the work and operations of its 253 institutions over the strategy period and consolidate overlapping functions, according to the strategy.
The 2026–2029 budget strategy is scheduled for its second reading in the city council on Thursday evening.
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Editor: Marko Tooming, Marcus Turovski
