Financial Situation of Cities in the Lodz Voivodeship in the Era of the COVID-19 Pandemic – Trends of Change and Impact on Indebtedness

Abstract

Purpose – The aim of this article is to identify and assess the change in the structure and direction of spending of the financial resources of the cities of Lodz Voivodeship in connection with the measures taken during the COVID-19 pandemic and their impact on the level of debt. Research method – The study uses data obtained from two sources: a questionnaire interview conducted in the target group of towns in Lodz voivodeship and the repository of the Local Data Bank CSO. Results – The research shows that the different cities have different profiles of the activities undertaken during the COVID-19 pandemic and how they were financed. The majority of cities financed these activities through targeted grants or from their own budget reserves, which implied no reduction in expenditure. A smaller number of cities financed these activities from other sources, which had the effect of reducing current and investment expenditure. Cities’ debt was increasing, but not as a direct result of the pandemic. Originality / value / implications / recommendations – On the basis of the data obtained, the authors distinguished three different profiles of actions taken to prevent the negative effects of the COVID-19 pandemic and ways of financing the resulting expenditure for cities in the Lodz Voivodeship. The need for further analysis in the context of new challenges: migration crisis, climate crisis, energy crisis was indicated.