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The Fiscal Council of Bulgaria has raised alarms about the rapid growth of personnel costs in the state budget over the past two years, warning that this trend poses a serious challenge for Budget 2026. According to the council’s analysis, public sector payrolls have risen sharply, both in total expenditure and relative to GDP, and several sectors now carry disproportionate burdens. The council recommends concrete measures to optimize costs, including merging municipalities to reduce administrative overhead, rationalizing the number of police officers, and requiring civil servants and police personnel to contribute to their own social insurance, aligning them with private sector standards. Municipal administration faces particular pressure as the population declines. Despite fewer residents, the number of municipal employees has grown to 35,000, and the administrative burden per citizen has increased significantly. Similarly, the police force has expanded, with Bulgaria now reporting 421 officers per 100,000 people, well above the EU average of 312. Spending on internal order and security accounts for 2.7% of GDP, compared with the EU average of 1.7%. The Fiscal Council highlights that such growth in personnel costs not only strains the budget but also fuels inflation by pushing private sector wages upward and creating perceptions of inequality across public services. In 2024, personnel costs totaled over 20 billion leva, exceeding initial projections by 2.2 billion leva. The education, healthcare, and state administration sectors dominate payroll expenditures, accounting for roughly 72% of total wages. Healthcare staffing increased from 101,000 in 2019 to 132,000 in 2024, with wages rising from 1.7 billion leva to 3.4 billion leva. Public sector salaries average 2,400 leva, outpacing the private sector average of 2,300 leva and creating labor market pressure. Social security contributions for civil servants are currently fully covered by the state, costing the budget roughly 385 million leva, while police and military contributions are similarly subsidized. The council argues that this arrangement is inequitable and economically illogical. Aligning contribution obligations with the private sector could reduce state expenditures by approximately 200 million leva or more. The judiciary also comes under scrutiny. Legal experts Ivan Bregov and Prof. Plamen Kirov criticize the Supreme Judicial Council’s decision to increase magistrates’ salaries by 18%, which could push some monthly earnings near 24,000 leva. They argue that the problem lies less with high wages and more with a bloated and inefficient workforce. Many positions remain unfilled, and the system suffers from slow case resolution, nepotism, and influence networks that compromise judicial independence. Despite substantial funding, over 1 billion euros for 2026, with 88% earmarked for salaries, the judiciary’s efficiency continues to decline. Cases such as "Debora" exemplify years-long delays, and disparities between public and private sector compensation remain stark. Overall, the Fiscal Council’s recommendations reflect the need for structural reforms, efficiency improvements, and alignment of social security contributions across the workforce, while judicial critics emphasize that high salaries without accountability fail to address systemic inefficiencies. The overarching message is clear: Bulgaria’s public sector growth, both in staffing and payroll, is unsustainable and calls for immediate measures to balance fiscal responsibility with service delivery.
