Chapter XXV: Közigazgatási és Területfejlesztési Minisztérium (Ministry of Public Administration and Regional Development)

Overview

Chapter XXV funds the Közigazgatási és Területfejlesztési Minisztérium (Ministry of Public Administration and Regional Development, KTM) — a ministry that began operating on 1 January 2024 — together with the twenty fővárosi és vármegyei kormányhivatalok (capital and county government offices) it supervises, the Felsőbbfokú Tanulmányok Intézete (Institute of Advanced Studies), and a wide block of chapter-managed appropriations (fejezeti kezelésű előirányzatok) covering regional development, the Területfejlesztési Alap (Regional Development Fund), active- and eco-tourism programmes, and cycle-route construction.

The chapter’s total expenditure is 433,807.4 millió Ft against revenue of 102,515.1 millió Ft, leaving a balance of −331,292.3 millió Ft. The expenditure splits into a 360,552.5 millió Ft domestic operating budget, a 73,254.9 millió Ft domestic capital budget, and a nil EU development budget.

The chapter is dominated by a single line. The kormányhivatalok absorb 330,154.9 millió Ft — 76 percent of the entire chapter. Everything else — the ministry’s own administration, the research institute, and the full block of regional-development and tourism appropriations — together amounts to 103,652.5 millió Ft, under a quarter of the total. Two analytical questions therefore carry the chapter. First: is the territorial state-administration apparatus a rights-protection and rule-of-law function, or is it administrative overhead that the classical-liberal frame would devolve or shrink? Second: do the discretionary regional-development and tourism appropriations finance anything the framework recognises as a legitimate object of compulsory taxation? The two questions have different answers, and the chapter classification follows from keeping them separate.

Expenditure Analysis

Kormányhivatalok (County and Capital Government Offices)

• Current allocation: 330,154.9 millió Ft (Personnel 251,522.1; Employer contributions 34,381.3; Material costs 37,286.2; Other operating 1,682.0; Capital investment 2,991.4; Renovations 2,290.9; Other capital 1.0)

• Classification: Keep (with a mandatory operating-efficiency and devolution review)

• Rationale: The twenty kormányhivatalok are the government’s general-jurisdiction territorial administrative bodies, created on 1 January 2011, and they perform a mixed set of functions.¹ A large part of what they do is genuine rule-of-law and rights-protection infrastructure: first- and second-instance administrative decisions on construction permits, guardianship (gyámügy), vital records, land registry and cadastral matters, and the operation of the kormányablak one-stop government windows.¹ These are the registration, adjudication, and enforcement functions through which property rights are recorded, contracts are given public effect, and citizens obtain the documents that let them transact. A classical-liberal frame does not treat this as discretionary spending; it treats the secure recording of title and the impartial first-instance adjudication of permits as part of the rule-of-law foundation the state legitimately finances. On that ground the line is a Keep.

  The Keep is not unqualified, and the qualification is not cosmetic. Hungary’s public sector accounts for roughly 26 percent of total employment — well above the OECD average near 21 percent and well above the Visegrád peers, with Czechia and Poland each below 20 percent.² A 251,522.1 millió Ft personnel envelope inside a single chapter is one visible component of that gap. The honest classification recognises two things at once: the function of secure registration and impartial adjudication is a Keep, but the current scale and centralisation of the apparatus delivering it is an open question that a single budget table cannot resolve. The right decision about a construction-permit process, a guardianship case, or a local land matter sits close to the people who bear its consequences and hold the local information; a national supervisory ministry standing above twenty offices is further from that information than a municipal or district tier would be. The classical-liberal reform here is not abolition — the function is legitimate — but devolution and efficiency: an audit of which kormányhivatal functions could be discharged at municipal level, which administrative procedures generate cost without securing any right, and where the headcount reflects the function rather than the absorption of labour into the public payroll.

• Transition mechanism: No phase-out. The line is held while a function-by-function review is conducted: separate the rights-protection and registration core (retained) from procedures that exist because the state regulates or licenses activity it need not (reviewed against the underlying regulation), and identify functions that subsidiarity would place at municipal or district level. Headcount adjustments follow the function review, not a blanket target. Where the review finds genuine over-staffing, normal attrition and redeployment — not forced redundancy — is the appropriate path for a retained function.

• Affected groups: The kormányhivatalok employ a large territorial workforce; the 251,522.1 millió Ft personnel line implies tens of thousands of staff across the twenty offices. A Keep classification protects their employment directly. A subsequent efficiency review would touch a subset, and the honest commitment is that any contraction of a retained function proceeds through attrition and redeployment rather than the severance mechanics used for an abolished body.

Kormányhivatalok működésével kapcsolatos egyéb feladatok (Other Tasks Related to the Operation of Government Offices)

• Current allocation: 4,111.3 millió Ft
• Classification: Keep
• Rationale: A chapter-managed appropriation funding tasks ancillary to the operation of the kormányhivatalok. It is bound mechanically to the kormányhivatal function and is classified identically: the underlying activity is retained, and the line stands or falls with the efficiency review applied to the main kormányhivatal allocation.
• Transition mechanism: None; reviewed alongside the main line.
• Affected groups: As for the kormányhivatalok.

Kormányhivatalok peres ügyei (Litigation of Government Offices)

• Current allocation: 10.0 millió Ft
• Classification: Keep
• Rationale: A small provision for the litigation costs the kormányhivatalok incur. Litigation against and by a rights-administration body is part of the cost of operating it under the rule of law — it is how contested administrative decisions are tested before courts. The classification follows the parent function.
• Transition mechanism: None.
• Affected groups: None of analytical significance.

Az államhatárral és az alapponthálózati pontokkal összefüggő geodéziai feladatok (Geodetic Tasks Relating to the State Border and the Reference-Point Network)

• Current allocation: 138.1 millió Ft
• Classification: Keep
• Rationale: Funds the maintenance of the state border survey and the national geodetic reference-point network. The reference-point network is the physical and mathematical foundation on which the land registry, cadastral survey, and every property boundary in the country depend; an accurate, maintained reference frame is what makes a title to a specific parcel of land mean a specific parcel of land. This is rule-of-law infrastructure for property rights in the most literal sense, and the small size of the line does not change the classification. Keep.
• Transition mechanism: None.
• Affected groups: None; the function underpins secure property title for every landowner.

Közigazgatási és Területfejlesztési Minisztérium igazgatása (Ministry Administration)

• Current allocation: 9,558.2 millió Ft (Personnel 7,278.1; Employer contributions 1,045.8; Material costs 1,145.7; Other operating 14.5; Capital investment 74.1)
• Classification: Nominal Freeze
• Rationale: This line funds the central apparatus of the ministry itself — the minister’s office, the state-secretariats, and the policy and supervisory staff. The ministry supervises a function (the kormányhivatalok) that is a Keep; it also administers a block of regional-development and tourism appropriations, much of which the analysis below recommends for phase-out or cut. A ministry whose supervised mandate is partly retained and partly wound down does not itself warrant expansion: the supervisory load falls as the discretionary appropriations are removed, while the oversight of the kormányhivatalok continues. A nominal freeze holds the line at its current level and lets real-terms erosion at typical inflation reduce its real share by roughly 20-25 percent over a decade — the appropriate treatment for an administrative line that is neither a candidate for abolition nor a candidate for growth. As the discretionary appropriations in the chapter-managed block are phased out, a portion of this administrative line becomes genuinely surplus and can be revisited for a deeper cut at that point.
• Transition mechanism: Hold the nominal allocation flat. Reassess once the chapter-managed regional-development and tourism appropriations have been wound down and the supervisory workload they generate has fallen.
• Affected groups: Ministry staff, whose employment is held flat in nominal terms; no displacement under a freeze.

Felsőbbfokú Tanulmányok Intézete (Institute of Advanced Studies)

• Current allocation: 613.2 millió Ft (Personnel 413.8; Employer contributions 56.9; Material costs 142.5)

• Classification: Phase-Out (3 years)

• Rationale: The Felsőbbfokú Tanulmányok Intézete is an interdisciplinary research institute, based in Kőszeg, conducting research at the intersection of the social and natural sciences and on regional development.³ Interdisciplinary academic research is valuable; the question the framework asks is not whether it is valuable but whether it must be financed by compulsory taxation from a ministry budget. Research-priority setting is a problem of dispersed, local knowledge: which questions are worth pursuing, which methods, which collaborations, is information held by scholars, funders, and the scholarly community, not by a central directorate. A state ministry appropriating 613.2 millió Ft to one institute is making a subjective allocation among research priorities that it has no calculation method to optimise. Academic research institutes in a classical-liberal settlement are properly financed by universities, by competitive and peer-reviewed research funding, by endowment, and by foundations — channels in which the allocation decision sits with those who hold the relevant judgement. The line concentrates a modest benefit on one institution while spreading the cost across every taxpayer; on the merits it is a candidate for Immediate Cut.

  It is classified as a short Phase-Out for one reason only: the protected party is the institute’s research and administrative staff, who hold employment contracts entered in good faith. The 413.8 millió Ft personnel line and the 56.9 millió Ft of associated employer contributions together — 470.7 millió Ft — are the payroll component.

• Transition mechanism: Severance-with-overlap over 24 months. The institute’s staff are researchers and administrators with general, transferable skills; the realistic re-employment path is into universities, the competitive research-funding sector, or private-sector research roles. Under severance-with-overlap each employee keeps full salary for 24 months and may take new employment during that period while keeping both incomes — a mechanism documented in the classical-liberal transition literature for closing small state-financed bodies whose staff have transferable skills.⁴ The payroll component of 470.7 millió Ft is protected and paid out across years 1 and 2; the non-payroll material costs of 142.5 millió Ft are cut in the first budget cycle, because supplier and facility contracts are honoured through contract run-off, not through a continuing budget line. In years 1 and 2 the net saving is the non-payroll component (142.5 millió Ft) while severance is still paid; from year 3 the full 613.2 millió Ft is saved. The institute itself is not abolished as a body of scholarship — it is invited to continue under university, foundation, or competitive-funding sponsorship; what ends is the direct ministry appropriation.

• Affected groups: The institute’s staff — on the order of 50-80 research and support employees at Hungarian academic salary levels, though the precise headcount should be confirmed against the institute’s published staffing return before the schedule is finalised. Each receives 24 months of full salary with the right to a second income immediately. The Kőszeg local economy loses a small employer; the research community loses a state-funded venue but not the scholars, who carry their work into other institutions.

Területfejlesztési Alap (Regional Development Fund)

• Current allocation: 65,000.0 millió Ft (Operating 8,300.0; Capital 56,700.0), against own-revenue of 65,000.0 millió Ft

• Classification: Phase-Out (4 years)

• Rationale: The Területfejlesztési Alap is the chapter’s second-largest line and the single largest discretionary item. It is a state fund that allocates 65,000.0 millió Ft — overwhelmingly capital spending — to regional-development projects selected by the ministry and the regional development councils. On the budget’s own face the fund is matched by 65,000.0 millió Ft of own-revenue, so it appears fiscally self-contained; the analytical point is that the revenue is not a voluntary payment for a service but an earmarked transfer into a discretionary allocation pool, and the spending it funds is the object of analysis regardless of how the revenue line is labelled.

  Government cannot create capital; it can only redirect it. Every forint the Területfejlesztési Alap allocates to a politically-selected regional project is a forint of saving not deployed to the project a private investor, judging by expected yield to future consumers, would have selected. The visible result is the funded project — a road, a facility, a development site — announced with a named beneficiary region. The unseen result is the projects that did not happen because the saving was diverted: the capital deepening that raises real wages follows from investment selected by the test of voluntary future demand, not by the test of which regional council made the application. A state development fund does not add to the national capital stock; it changes who selects where the existing saving goes, from the entrepreneur facing a profit-and-loss plebiscite to the official facing a political one.

  This is also where the chapter touches the deepest structural feature of Hungarian fiscal debate. A discretionary fund that allocates 65 milliárd Ft of capital among regional applicants generates a rent: the applicant who aligns with the fund’s stated priorities, or with the officials who administer it, obtains capital it did not have to earn from consumers. That rent exists independent of which government holds the allocation power and independent of how clean the tender process is. A more transparent Területfejlesztési Alap with better-credentialed recipients redirects the same rent to a different set of applicants; it does not eliminate the rent, because the rent is the discretionary allocation itself. The classical-liberal reform is not “administer the fund better” but “narrow the discretionary surface” — wind the fund down and let regional capital allocation return to the savers and investors whose own money is at stake.

• Transition mechanism: Phase-Out over 4 years on a linear glide. The horizon is set by the in-flight commitment profile: a capital-allocation fund of this size carries multi-year project commitments and framework agreements that bind the next several budget cycles, and good-faith counterparties — regions and contractors that have begun projects under existing allocation decisions — have a reliance claim on the completion of work already commenced. The honest treatment is to honour in-flight project commitments to their contractual completion while authorising no new allocation rounds. The fund’s allocation envelope declines from 65,000.0 millió Ft toward zero over four years as committed projects complete and no replacements are approved; the corresponding own-revenue earmark is released back to general revenue or, preferably, returned to taxpayers as the fund winds down. Where regional infrastructure remains genuinely necessary, it is financed by the local tier that bears its cost and holds the information to judge it, not by a national discretionary pool.

• Affected groups: Regions and municipalities that have relied on the fund as a capital source; construction contractors with in-flight framework agreements, whose existing contracts run to completion; regional development councils, whose allocation role ends. No individual citizen’s life plan is tied to the continuation of the fund; the reliance interest is contractual and is honoured through run-off of committed projects.

Fejlesztési Tanácsok működési támogatása (Operating Support for Development Councils)

• Current allocation: 830.0 millió Ft (Operating 825.0; Capital 5.0)
• Classification: Phase-Out (4 years)
• Rationale: This line funds the operating costs of the regional development councils — the bodies that administer the regional allocation decisions the Területfejlesztési Alap funds. The councils exist to operate a discretionary allocation function; once that function is wound down, the bodies that operate it have no enduring rationale. The honest classification is phase-out parallel to the underlying activity: as the Területfejlesztési Alap’s allocation rounds cease over four years, the councils’ operating support tracks the same glide to zero. Maintaining the administrative apparatus of a function that is being discontinued would be paying for the second-best substitute for a market discipline the reform is restoring.
• Transition mechanism: Linear phase-out over 4 years, tracking the Területfejlesztési Alap wind-down. The councils’ staff hold employment contracts; the four-year horizon gives a realistic transition window, and where staff are on permanent contracts the final-year contraction is handled with severance appropriate to the headcount.
• Affected groups: The development councils’ administrative staff; the four-year horizon provides a transition window. Member regions lose a coordinating body whose function the reform devolves.

Fejlesztési Tanácsok fejlesztési forrása (Development Resource of the Development Councils)

• Current allocation: 220.0 millió Ft (Operating 83.0; Capital 137.0)
• Classification: Phase-Out (4 years)
• Rationale: A second, smaller discretionary development resource channelled through the same regional development councils. It is the same mechanism as the Területfejlesztési Alap at smaller scale — politically-selected allocation of capital — and is classified identically, on the same four-year glide.
• Transition mechanism: Linear phase-out over 4 years, parallel to the Területfejlesztési Alap and the councils’ operating line.
• Affected groups: As for the development councils above.

Lechner Tudásközpont (Lechner Knowledge Centre)

• Current allocation: 40.5 millió Ft
• Classification: Keep
• Rationale: This appropriation contributes to the Lechner Tudásközpont, the state body that operates national spatial-planning, cadastral, and building-documentation information systems. The portion of its work that maintains the spatial-data and building-registry infrastructure underpinning land registry and construction administration is rule-of-law infrastructure for property rights, in the same category as the geodetic reference network. The small appropriation here is retained on that ground. Any part of the Lechner centre’s mandate that extends beyond core registry and spatial-data infrastructure into discretionary urban-design or promotional activity should be reviewed under the same function-separation logic applied to the kormányhivatalok, but the line itself is small and the core function is a Keep.
• Transition mechanism: None; reviewed for function separation alongside the kormányhivatal efficiency review.
• Affected groups: None of analytical significance.

Egyéb források (Other Resources)

• Current allocation: 150.0 millió Ft
• Classification: Phase-Out (4 years)
• Rationale: An unspecified “other resources” appropriation within the regional-development sub-chapter. An appropriation labelled only “other,” sitting inside the regional-development block alongside the development councils and their funds, is a discretionary reserve for the same class of activity. In the absence of a specific bounded mandate it is classified with the regional-development block on the same four-year glide; if a specific non-discretionary function is later identified within it, that function would be reclassified on its own merits.
• Transition mechanism: Linear phase-out over 4 years, with the regional-development block.
• Affected groups: None identifiable from the budget data; the line carries no specified beneficiary.

Társadalmi szervezetek, alapítványok és köztestületek támogatása (Support for Social Organisations, Foundations and Public-Law Bodies)

• Current allocation: 79.8 millió Ft
• Classification: Immediate Cut
• Rationale: This line is a discretionary transfer from the ministry budget to social organisations, foundations, and public-law bodies. It is a subjective allocation of taxpayers’ money by political officeholders: the ministry decides which associations and foundations receive support, on what basis, and in what amount. Associations and foundations whose members value their activity can fund that activity through the voluntary contributions of those members; an association that cannot raise its budget from the people who care about its work is, on the framework’s reading, telling the analyst something about the actual demand for that work. The line concentrates a benefit on organised associations while spreading the cost across every taxpayer, including the many who have never heard of the recipients and would not choose to fund them. There is no rights-protection function, no constitutional precondition, and no protected reliance interest of the kind that converts an Immediate Cut into a Phase-Out — the recipients are organisations that can solicit voluntary funding, not employees with contracts or pensioners with accrued entitlements. The line is eliminated in the first budget cycle.
• Transition mechanism: Eliminate in the first budget cycle. Recipient organisations transition to membership contributions, charitable giving, and voluntary fundraising.
• Affected groups: The associations and foundations currently receiving the transfer. Each retains the option to fund its activity from the voluntary contributions of those who value it.

Aktív- és Ökoturisztikai Fejlesztési Központ Nonprofit Korlátolt Felelősségű Társaság (Active and Eco-Tourism Development Centre Nonprofit Ltd.)

• Current allocation: 1,897.1 millió Ft (Operating 1,832.1; Capital 65.0)

• Classification: Phase-Out (3 years)

• Rationale: The Aktív- és Ökoturisztikai Fejlesztési Központ is a state-owned nonprofit company whose mandate is to coordinate, promote, and develop active- and eco-tourism — walking, cycling, water, equine, and nature-tourism infrastructure and programmes.⁵ Tourism promotion and tourism-infrastructure development are commercial activities. The operators who benefit from active-tourism visitors — accommodation, guiding, equipment rental, hospitality — are private businesses that earn revenue from voluntary customers, and the test of whether a piece of tourism infrastructure or a promotional campaign is worth its cost is whether the businesses it serves will fund it. A state company carrying out this activity faces no such test: its survival depends on the ministry transfer, not on a consumer plebiscite, so the question “is it efficient” cannot be answered from the data the arrangement generates — efficiency in tourism development is the output of the market test, and the market test has been replaced by an appropriation. The activity belongs in the private and voluntary sector — tourism boards funded by the businesses they serve, destination-marketing organisations funded by member levies, private operators investing in their own infrastructure.

  It is classified as a Phase-Out rather than an Immediate Cut because the protected party is the company’s employees, who hold employment contracts. The operating allocation of 1,832.1 millió Ft funds both payroll and non-payroll programme costs; the chapter table does not break the company’s payroll out separately. A state nonprofit company of this kind typically runs payroll at roughly a third of its operating budget — taken here as an estimated payroll component of approximately 610 millió Ft pending confirmation against the company’s published accounts before the schedule is finalised. The two-year horizon reflects a small organisation whose staff have transferable skills in marketing, project management, and tourism.

• Transition mechanism: Severance-with-overlap over 24 months for the payroll component, with the non-payroll programme and capital spending cut in the first budget cycle. The company’s marketing, coordination, and project-management staff have transferable skills; the re-employment path is into private tourism businesses, destination- marketing organisations, or the wider marketing sector. In-flight infrastructure commitments run to contractual completion. Where active-tourism infrastructure remains genuinely wanted, the businesses and municipalities that benefit from it are the parties who should fund it. The payroll-share estimate is provisional; the schedule should be re-derived once the company’s audited accounts confirm the personnel subset.

• Affected groups: The company’s employees, protected by 24 months of severance-with-overlap; private tourism operators who currently benefit from state-funded coordination and promotion, who would thereafter fund destination marketing through the voluntary member-levy model used by tourism boards internationally.

Aktív kikapcsolódást és egészségmegőrzést szolgáló feladatok, programok, beruházások (Active Recreation and Health-Preservation Tasks, Programmes, and Investments)

• Current allocation: 13,086.3 millió Ft, comprising three sub-lines:

  • Aktív kikapcsolódást szolgáló feladatok, programok (tasks and programmes): 5,581.3 millió Ft (Operating 5,005.0; Capital 576.3)
  • Aktív kikapcsolódást szolgáló infrastruktúra-fejlesztések (infrastructure development): 5,505.0 millió Ft (Operating 505.0; Capital 5,000.0)
  • Országos Horgászturisztikai Hálózati Program (National Angling- Tourism Network Programme): 2,000.0 millió Ft (Operating 200.0; Capital 1,800.0)

• Classification: Immediate Cut

• Rationale: This block of 13,086.3 millió Ft funds active-recreation programmes, recreation-infrastructure construction, and a national angling-tourism network programme. It is a discretionary state allocation toward leisure, recreation, and tourism — activities that citizens choose, pay for, and value through voluntary spending in a thick existing market. People who fish buy fishing equipment, licences, and trips from private suppliers; people who cycle, hike, and take active holidays do so through a deep voluntary market of operators, retailers, and clubs. There is no rights-protection function here, no constitutional precondition, no protective response to irreversible involuntary harm. A 5,000.0 millió Ft capital line for recreation infrastructure and a 1,800.0 millió Ft capital line for an angling-tourism network redirect saving from market-selected investment to politically-selected leisure projects — the same opportunity-cost argument that applies to the Területfejlesztési Alap, here without even the regional-development rationale.

  Unlike the staffed state company analysed above, these are programme and infrastructure appropriations, not the payroll of a body of employees with reliance claims. Programme spending stops when it is no longer appropriated; in-flight construction contracts are honoured by contract run-off, which is a matter of months, not a continuing budget line. There is no protected party of the kind that converts an Immediate Cut into a Phase-Out. The block is eliminated in the first budget cycle.

• Transition mechanism: Eliminate in the first budget cycle. In-flight construction and programme contracts run to their contractual break points; no new commitments are authorised. Recreation and angling activity continues in the voluntary market that already serves it.

• Affected groups: Contractors with in-flight infrastructure contracts, honoured through run-off; recreation and angling participants, who continue to use the voluntary market. No employee payroll and no citizen’s life plan is tied to the continuation of these programme lines.

Kerékpáros útvonalak fejlesztése (Cycle-Route Development)

• Current allocation: 1,305.5 millió Ft (capital)
• Classification: Immediate Cut
• Rationale: New cycle-route construction is discretionary leisure- and tourism-infrastructure spending of the same character as the recreation block above: it redirects saving toward politically-selected leisure projects. It is a capital appropriation, not a body of staff with reliance claims; in-flight construction contracts are honoured through contract run-off rather than through a continuing budget line. New construction is properly decided and funded by the municipalities through whose territory routes run, by user contributions, or by the private and voluntary cycling and tourism bodies that value it — the level that holds the local knowledge of which routes are wanted and bears the cost of building them. The line is eliminated in the first budget cycle.
• Transition mechanism: Eliminate in the first budget cycle. In-flight construction contracts run to their contractual break points; no new construction is authorised.
• Affected groups: Contractors with in-flight construction contracts, honoured through run-off; municipalities, which assume the decision and funding of any new routes they want.

Kerékpáros útvonalak fenntartása, üzemeltetése (Cycle-Route Maintenance and Operation)

• Current allocation: 1,500.0 millió Ft (capital)
• Classification: Phase-Out (3 years)
• Rationale: This line funds the maintenance and operation of existing cycle routes. It is distinguished from new construction by one feature: maintained cycle infrastructure already exists, and abruptly ceasing its maintenance would leave built public infrastructure to degrade — a different situation from cancelling a not-yet-built project. The decision about which routes to maintain, and to what standard, is local information held by the municipalities and residents who use them, not by a national ministry. The classical-liberal reform is devolution: existing routes and their maintenance pass to the municipalities through whose territory they run, financed and prioritised at the level that bears the cost and holds the knowledge. A three-year Phase-Out transfers the maintenance responsibility in an orderly way rather than abandoning the infrastructure.
• Transition mechanism: Linear phase-out over 3 years. The maintenance line glides down as responsibility for existing routes is transferred to the municipalities through whose territory they pass, with the three-year window allowing those municipalities to incorporate the routes into their own budgets and maintenance arrangements.
• Affected groups: Municipalities, which assume responsibility for cycle infrastructure on their territory over the transition window; cyclists, whose existing routes are maintained throughout the transition and thereafter by the devolved local arrangements.

Magyar Természetjáró Szövetség támogatása (Support for the Hungarian Hiking Federation)

• Current allocation: 500.0 millió Ft
• Classification: Immediate Cut
• Rationale: A direct transfer to the Magyar Természetjáró Szövetség, the Hungarian Hiking Federation — a membership association of hikers and hiking clubs. A federation of hikers is the textbook case of an association whose members can fund their own activity: hiking clubs have members, members pay subscriptions, and the activity the federation organises is valued precisely by the people who would contribute to it voluntarily. A 500.0 millió Ft transfer from general taxation to a hiking federation asks every taxpayer — including those who do not hike and have no connection to the federation — to fund the recreational activity of the federation’s members. Stated without the euphemism of “support for nature-tourism,” this is a tax-financed subsidy to the hobby of an organised membership group. The classification is an Immediate Cut on principle; the size of the line is not the criterion, the mechanism is. The federation continues, as membership associations do everywhere, on the subscriptions and voluntary contributions of the people who value hiking.
• Transition mechanism: Eliminate in the first budget cycle. The federation transitions to membership subscriptions and voluntary contributions — the funding model of hiking and outdoor associations internationally.
• Affected groups: The Magyar Természetjáró Szövetség and its member clubs, who fund the federation’s activity through the subscriptions of their members.

Közvetlen uniós programok támogatása (Support for Direct EU Programmes)

• Current allocation: 4,500.0 millió Ft (Operating 3,691.3; Capital 808.7)
• Classification: Nominal Freeze
• Rationale: This line provides national co-financing and administrative support for directly-managed EU programmes — programmes contracted directly with the European Commission rather than channelled through the national operational programmes. While Hungary remains an EU member and these programme agreements bind, the national co-financing commitments attached to them are contractual obligations to programme counterparties; they are a parameter of the transition path, not a discretionary line the budget can simply cancel without abrogating commitments made in good faith. At the same time the line is not a function the classical-liberal frame would treat as a permanent Keep — it exists because of Hungary’s current EU programme participation, and its appropriate long-run treatment depends on decisions about that participation that sit far outside this chapter. A Nominal Freeze is the honest interim classification: it holds the line at its current level, honours in-flight programme commitments, authorises no expansion, and lets real-terms erosion reduce its real share while the broader question of programme participation is decided elsewhere.
• Transition mechanism: Hold the nominal allocation flat. In-flight programme commitments are honoured to their contractual terms; no new programme co-financing commitments are entered without separate assessment.
• Affected groups: EU programme counterparties with in-flight agreements, whose contractual commitments are honoured.

Önkormányzati szövetségek támogatása (Support for Municipal Associations)

• Current allocation: 12.0 millió Ft
• Classification: Immediate Cut
• Rationale: A small transfer to the associations of local governments — bodies through which municipalities coordinate and represent their shared interests. Municipalities are themselves units of government with their own budgets; an association of municipalities is funded, naturally and appropriately, by the contributions of its member municipalities, in the same way that any membership organisation is funded by its members. A separate state appropriation to these associations adds a layer of central financing to bodies that have an obvious and adequate own-funding source. The line is small and the classification follows directly from the mechanism: Immediate Cut, with the associations funded by member-municipality contributions.
• Transition mechanism: Eliminate in the first budget cycle. The associations transition to funding by their member municipalities.
• Affected groups: The municipal associations, funded thereafter by their members.

Fejezeti általános tartalék (General Chapter Reserve)

• Current allocation: 99.5 millió Ft
• Classification: Keep
• Rationale: A general contingency reserve within the chapter, provided to meet unforeseen in-year requirements across the chapter’s retained functions. A modest contingency reserve is a normal and prudent feature of a budget chapter that retains substantial functions — principally the kormányhivatalok. The reserve is small (99.5 millió Ft against a 433,807.4 millió Ft chapter) and bounded; it is retained. As the chapter’s discretionary appropriations are wound down, the appropriate size of the reserve falls with the reduced chapter envelope, and it should be resized at that point.
• Transition mechanism: None; resized downward as the chapter’s discretionary lines are phased out.
• Affected groups: None.

Év közben jelentkező többletfeladatok (Additional Tasks Arising During the Year)

• Current allocation: 1.0 millió Ft
• Classification: Keep
• Rationale: A nominal 1.0 millió Ft placeholder line for additional tasks arising in-year. The amount is a token provision with no material fiscal significance; it is retained as a technical line. Classification carries no analytical weight at this scale.
• Transition mechanism: None.
• Affected groups: None.

Revenue Items

The chapter records 102,515.1 millió Ft of revenue against 433,807.4 millió Ft of expenditure — 102,514.1 millió Ft on the operating side and 1.0 millió Ft on the capital side. The revenue is concentrated almost entirely in one line.

• Name: Területfejlesztési Alap bevétele (Regional Development Fund revenue)

• Current yield: 65,000.0 millió Ft (operating revenue)

• Type: Other (earmarked transfer into a state fund)

• Notes: The Területfejlesztési Alap shows 65,000.0 millió Ft of own-revenue exactly matching its 65,000.0 millió Ft of expenditure. This is not a fee paid voluntarily for a service; it is an earmarked inflow that funds the fund’s discretionary allocation. If the Területfejlesztési Alap is phased out as recommended above, this revenue earmark is released — either returned to general revenue or, preferably, to taxpayers — and disappears as a chapter revenue line in step with the expenditure it funds.

• Name: Kormányhivatali és igazgatási eljárási bevételek (Government-office and administrative-procedure revenues)

• Current yield: approximately 37,515.1 millió Ft (the residual of operating revenue after the Területfejlesztési Alap line)

• Type: Fee / Charge

• Notes: The remaining operating revenue, on the order of 37,515.1 millió Ft, derives principally from the administrative-procedure fees and charges the kormányhivatalok collect — permit fees, registration fees, certificate charges, and similar. These are fees attached to the state-administration functions classified as a Keep above; they continue with the retained function. Where the kormányhivatal efficiency review removes a procedure that exists only because the state regulates or licenses something it need not, the associated fee revenue falls with the procedure — but for the rights-protection and registration core, the fee revenue is stable. The precise breakdown of this residual is not resolvable from the chapter’s summary table; it is presented here as the arithmetical residual against the chapter revenue total.

No major tax revenue lines appear in this chapter; the revenue is fee-, charge-, and earmark-based, and no rate look-up applies.

Chapter Summary

Classification	Count	Total (millió Ft)
Immediate Cut	5	14,983.6
Phase-Out	7	70,210.3
Nominal Freeze	2	14,058.2
Keep	7	334,555.3
Total	21	433,807.4

Immediate Cut detail: Társadalmi szervezetek támogatása 79.8 + Aktív kikapcsolódás block 13,086.3 + Kerékpáros útvonalak fejlesztése 1,305.5

• Magyar Természetjáró Szövetség 500.0 + Önkormányzati szövetségek 12.0 = 14,983.6 (5 entries: XXV-E17 through XXV-E21).

Phase-Out detail: Felsőbbfokú Tanulmányok Intézete 613.2 + Területfejlesztési Alap 65,000.0 + Fejlesztési Tanácsok működési támogatása 830.0 + Fejlesztési Tanácsok fejlesztési forrása 220.0 + Egyéb források 150.0 + Aktív- és Ökoturisztikai Fejlesztési Központ 1,897.1 + Kerékpáros útvonalak fenntartása 1,500.0 = 70,210.3.

Nominal Freeze detail: Ministry administration 9,558.2 + Közvetlen uniós programok 4,500.0 = 14,058.2.

Keep detail: Kormányhivatalok 330,154.9 + Kormányhivatalok egyéb feladatok 4,111.3 + Kormányhivatalok peres ügyei 10.0 + Geodéziai feladatok 138.1 + Lechner Tudásközpont 40.5 + Fejezeti általános tartalék 99.5 + Év közben többletfeladatok 1.0 = 334,555.3 (7 distinct entries: XXV-E1 through XXV-E7; the Kormányhivatalok line is itself a composite of seven kiemelt előirányzat rows).

Revenue	Total (millió Ft)
Total chapter revenue	102,515.1

Key Observations

• The chapter is two chapters in one. Three-quarters of it — the 330,154.9 millió Ft kormányhivatal envelope and the small lines tied to it — finances territorial state administration whose core is genuine rule-of-law and rights-protection infrastructure: secure registration of title, impartial first-instance adjudication of permits and guardianship, the geodetic reference frame on which every property boundary depends. That core is a Keep. The remaining quarter is a block of discretionary regional-development, recreation, and tourism appropriations, most of which the framework recommends for phase-out or cut.

• The Keep on the kormányhivatalok is a Keep on the function, not an endorsement of the current scale. Hungary’s public sector is roughly 26 percent of total employment against an OECD average near 21 percent and Visegrád peers below 20 percent; a quarter-trillion-forint personnel line is one visible component of that gap. The classification rule is that Keep precludes phase-out, not operating-efficiency review — and the chapter’s largest line carries a mandatory function-separation and devolution audit: which procedures secure a right and which exist because the state regulates what it need not; which functions subsidiarity would place at municipal level.

• The Területfejlesztési Alap is the structural centre of the chapter. A 65,000.0 millió Ft discretionary capital-allocation fund does not add to the national capital stock — it changes who selects where existing saving goes, from the entrepreneur facing a profit-and-loss test to the official facing a political one. The rent it generates — capital obtained by alignment rather than earned from consumers — is invariant to how clean the tender is and to which government administers it. A more transparent fund redirects the same rent to better-credentialed applicants; only winding the discretionary surface down removes it. This is the chapter’s clearest instance of the pattern in which the administration question is downstream of the allocation question.

• The recreation and tourism lines — the 13,086.3 millió Ft active- recreation block, the 1,897.1 millió Ft tourism-development company, the 500.0 millió Ft hiking-federation transfer, the cycle-route lines — share one feature: they finance activities that citizens already choose, pay for, and value through a thick voluntary market. The seen is the funded programme or the subsidised federation; the unseen is the taxpayer, including every taxpayer who does not hike, cycle, or fish, whose income funded another group’s recreation. Where the protected party is employees with contracts (the tourism company, the research institute), the classification is a payroll-aware Phase-Out; where it is programme spending or a membership association that can fund itself, it is an Immediate Cut.

• Phasing reflects the protected party in each case. The two severance-with-overlap Phase-Outs — the Felsőbbfokú Tanulmányok Intézete and the Aktív- és Ökoturisztikai Központ — protect the payroll of employees with transferable skills while cutting non-payroll costs immediately. The Területfejlesztési Alap and the regional- development block phase out over four years on a linear glide set by the multi-year project-commitment profile, not by political convenience. The cycle-route maintenance line phases out over three years as responsibility devolves to municipalities. Where there is no protected party — programme appropriations, new cycle-route construction, a self-funding membership federation, transfers to associations with their own funding source — the honest classification is Immediate Cut.

Sources

Footnotes

1. Kormányhivatal. Wikipédia. 2025. https://hu.wikipedia.org/wiki/Korm%C3%A1nyhivatal. The kormányhivatalok are described as “a kormány általános hatáskörű területi államigazgatási szervei,” created on 1 January 2011, twenty in number (19 county and 1 capital), led by a főispán appointed by the Prime Minister, performing first- and second-instance administrative authority in matters including construction, guardianship, and operating the kormányablak one-stop government windows at over 300 locations. ↩ ↩²

2. Government at a Glance 2023. OECD. 2023. https://www.oecd.org/en/publications/government-at-a-glance-2023_3d5c5d31-en.html. General government employment as a share of total employment; Hungary above the OECD average, with Visegrád peers (Czechia, Poland) lower. ↩

3. About iASK. Institute of Advanced Studies Kőszeg (Felsőbbfokú Tanulmányok Intézete). 2025. https://iask.hu/en/about-us/about-iask/. The institute is described as providing “creative space for research, innovation and development in science and the arts that transcends disciplinary boundaries,” fostering interdisciplinary research and regional development, and merging the natural and social sciences. ↩

4. Reisman, George. Capitalism: A Treatise on Economics. Jameson Books. 1996. Chapter on transition mechanics: where a state function is wound down, affected employees with transferable skills retain full state salary for a defined transition period (typically 12-24 months) and may take new private-sector employment during that period while keeping both incomes. ↩

5. Megalakult az Aktív és Ökoturisztikai Fejlesztési Központ. Országos Erdészeti Egyesület (oee.hu). 2019. https://www.oee.hu/hirek/agazati-szakmai/aktiv_okoturisztikai_fejlesztes_kozpont_megalakult. The centre’s mandate is the coordination, promotion, and professional evaluation of active- and eco-tourism, and the coordination and implementation of related developments and investments — walking, cycling, water, equine, and nature-tourism infrastructure. ↩