Budapest’s transport and finance committees have convened an emergency session to assess the fallout from the government’s recent measures, which local leaders say have pushed the capital to the verge of financial collapse.

On June 4, the government passed a decree that would lower the local business tax paid by state gambling company Szerencsejatek by HUF18bn (€45mn), excluding gambling companies such as Budapest casinos operated by Fidesz cronies. According to the city’s liberal mayor, the budgetary loss could amount to HUF100bn when including the total impact, as the regulation would apply to other private gambling companies. 

"The government has obviously made a political decision: they want to push the city to the brink of an abyss. The political intention to paralyse the capital's operations is obvious," Budapest’s liberal mayor Gergely Karacsony said.

Critics suspect that the tax relief could free up funds within the state gambling company that could be used to support pro-Fidesz foundations, artists and civil groups, potentially fuelling Orban’s election campaign machinery under the radar. On and off the campaign trail, Fidesz has used state-owned companies to fund its media, loyalist think tanks, and NGOs that reinforce government narratives.

The decree is yet another financial blow to the city, which is fighting an uphill battle with the government on several issues. The government increased the solidarity tax paid by Budapest from HUF5bn in 2019, under a Fidesz-led mayor, to over HUF89bn. The tax was introduced to help underdeveloped settlements, but the levy was steeply raised after the pandemic as the central budget lacked funding to support poorer municipalities.

Budapest is currently in court to reclaim HUF28bn in extra payments, and a Court of Appeal ruling earlier this year found in favour of the city against the government. The 2025 budget was approved with the assumption that the state would comply with the ruling and pay back the sum. Instead, the State Treasury has withdrawn more than HUF10bn from Budapest’s accounts this week.

Budapest has submitted a request for immediate judicial protection to maintain liquidity.

Some local council members warn that the city’s public services could collapse without an immediate lifeline. This could come in the form of an increased credit line from OTP or a tax deferral.

"If electricity is shut off in the metro, that’s on the government," declared opposition politician David Vitezy, runner-up in the June 2024 mayoral race. "And I don’t think they would dare go that far," he added, noting that both MOL and state utility MVM posted hundreds of millions of euros in profits.

Public transport in Budapest will come to a 10-minute halt on June 5 in protest of the government’s measures, Karacsony announced. In the meantime, public transport unions will be setting up strike committees.