Municipal Revenue Research Articles

Implications of Municipal Revenue Collection on Service Delivery in South Africa: Challenges and Recommendations

In South Africa, citizens have protested against inadequate services provided by municipalities across different provinces. It is argued that most protests were caused by poor service delivery, a lack of community engagement, corruption, mismanagement of public resources, lack of institutional capacity and unqualified personnel. Thus, this study evaluates the difficulties associated with revenue collection and its implications on service delivery. To assess this aim, the study adopted a qualitative research approach. This study reviewed secondary data from different databases. The study keywords were used to search for relevant studies. The study was analyzed using a thematic content approach. Moreover, the study adopted two theoretical frameworks namely; ability to pay and the benefits theory. The key findings of this study include substantial difficulties in revenue collection, which in turn affect the provision of services. Poor service delivery is continuously caused by a lack of sufficient financial resources and ineffective revenue collection mechanisms. This study indicates a significant link between low revenue collection and inadequate service delivery. The recommendations of this study to municipalities include employing qualified officials, creating rebates and discounts for paying consumers, regularly examining critical credit regulations, guaranteeing high-quality service, and boosting revenue collection in light of these findings.

Cannabis Licensing and Municipal Revenues

Municipal license policy has shaped the early roll-out and business outcomes of Proposition 64. Several stakeholders identify license availability as a key constraint to future cannabis market growth in California. Recent studies explore local cannabis licensing policy; however, key questions remain around municipal revenues, business location, and the role of supporting cannabis business ownership. Our paper explores the impacts of cannabis licensing on business locations and municipal taxable revenues. We use publicly-available Department of Cannabis Control licensing data to examine business locations using GIS analysis, conduct a regression analysis of city-level licenses and Department of Tax and Fee Administration revenues across California, and forecast potential municipal taxable revenues in South Bay Los Angeles. We find that licensed cannabis businesses appear to develop in Los Angeles County and are located close to borders of cities not issuing licenses, in areas of favorable zoning, in densely populated locations, and areas with higher poverty and minority populations. Our regression analysis suggests that city population drives municipal taxable revenue, indicating that business follows demand.

Green bond premium diagnosis: An interplay of repayment obligation structure

This paper examines at-issuance yield (price) differential between green and non-green bonds. The paper also checks the sensitiveness of the differentials to the repayment obligation structure of the bonds. For this, we test for differentials in the standard and revenue segments separately. From Bloomberg®, we extract US municipal green bonds from 2014 to 2023 and apply propensity score matching to generate sample sets comprising 26440, 23848, and 11702 bonds. Through univariate tests and OLS linear regression, we document lower yield for green bonds compared to non-greens (i.e., negative yield differential implying the existence of green premium) ranging from 2.7 to 6.9 basis points, implying cost savings to green issuers. The results are robust to alternate measuring variable and surrogate matched samples—the premiums decline in a non-pro-environmental regime and the pandemic. Green investors perceive higher risk in counties with higher pollution index. The premiums enlarge in the standard segment compared to revenue because of greater trust in the recourse feature than revenue stream collaterals. Citing the lack of tangible municipal revenue streams in emerging economies, our findings endorse the standard (general obligation) green bonds to raise finance at initial stages and create revenue-generating infrastructures.

Revenue Streams and Capital Outlay: An Empirical Study of Municipal Corporations in India

This paper empirically tests the relationship between municipal revenue streams and capital outlay focused on building new infrastructure and amenities for sustainable urban development. The study follows a cross-sectional research design without a time dimension using secondary data from municipal corporations across 26 Indian states and Union Territories obtained from the Reserve Bank of India’s Report on Municipal Finances. An Ordinary Least Squares model was used to estimate the coefficients of own tax revenue, own non-tax revenue and revenue from government transfers. The study's main results show that while coefficients of own non-tax revenue sources, i.e., Rental Income, Fees & User Charges, and Interest earned are 8.52, 3.56, and 40.43 respectively with associated p-values of 0.000, suggesting greater influence in determining capital outlay, the coefficients of own tax revenue sources such as Property Tax, Water Tax, and Advertisement Tax are -0.21, -2.96 and 15.78 respectively with p-values exceeding 0.05 suggesting an insignificant relationship. Transfers from the central government are significant factors influencing capital outlay of the municipal corporations given by a coefficient of 2.45 with an associated p-value of 0.01, while state government transfers have a negative relationship given by a coefficient of -1.15 with a p-value of 0.023. The study also employs several diagnostic tests to ensure validity of the results and robustness of the model employed. The Adjusted R-squared value of 0.98 shows the model is a good fit and coefficients are relevant. Model diagnostics reveal that the results are efficient and model is a good fit to the data. The paper then concludes with discussion on the results obtained and policy suggestions along with indicating scope for further research in the field.

Global Gain, but Local Loss—National Park and Municipal Revenues in Poland

The paper analyzes the problem of stagnation in the creation of new national parks in Poland, identifying key barriers and proposing solutions. The background to the study refers to the role of national parks in nature conservation, but at the same time highlights the problem of the limited development of the park network in Poland, which remains at 1.05% of the country’s area—well below the EU average. The main obstacles identified by the author are the resistance of local governments due to the reduction in forest tax revenues and the differences in salaries between employees of national parks and state forests. Research methods included legal and economic analysis and a review of the literature on national park management. The results indicate that the problem can be solved by adequate financial compensation to local communities and the introduction of a co-management model that integrates the interests of local governments and parks. The article suggests that a change in the approach of the government administration and a more participatory management model can help to break the stagnation and increase the number of national parks, which is relevant not only for Poland but also for other countries struggling with similar challenges.

The importance of revenues from spa fee in financing municipalities in Poland

Motivation: The subject of interest presented in this study is the problem of spa fee and the resulting municipal revenues. In accordance with the international and constitutional standard of financial adequacy, including this fee in the revenue catalogue of only some municipalities should result from their specificity, i.e. generating additional budgetary expenditure not incurred by other municipalities. Aim: The purpose of this paper is to address the systemic differences of spa municipalities, and primarily the additional tasks imposed on them, as well as to analyse and assess the importance of spa fee in the financial management of municipalities. Based on the analysis of this fee legal structure, and in particular its subject, an attempt was made to indicate the factors influencing its fiscal efficiency and significance. Results: The fiscal efficiency of the discussed fee, as compared to other revenue categories, and its importance in the municipal financing structure are small (approx. 0.028% of the total municipal revenues and 1.41% of the total revenues generated by spa municipalities). The main factor influencing the amount of revenues from the fee and its share in the revenue structure is related to tourist activity in the municipality, mainly referring to a therapeutic treatment of natural persons. In the municipalities characterized by high tourist traffic, which results in an extensive accommodation offer corresponding to the demand, the importance of the fee in terms of financing is at a significant level, reaching even 6.8% of total revenues in the entire analysed period, i.e. 2017-2021 and over 8.8% in 2017. The occurrence of such cases is an argument proving the significant revenue potential of the fee. Increasing its use, in addition to developing both therapeutic and accommodation infrastructure in a municipality also requires taking action aimed at ensuring better efficiency of the spa fee collection.

Belediye Yönetimlerinin Gelir ve Harcama Politikaları Nasıl Olmalıdır?

Revenue and expenditure policies of municipal governments should be determined by taking into account the principles of sustainability, efficiency and justice of local governments. The main purpose of these policies is for municipalities to provide public services effectively and increase the welfare of the society. Revenue policies determine the resources that municipalities can use to meet their budget needs. These sources generally consist of local taxes, fees, transfers and other revenue sources. It is important that income policies are fair and burden different segments of society in a balanced manner. At the same time, a reliable basis should be created for budget planning and long-term investments by ensuring the continuity and predictability of revenues. Expenditure policies determine how municipalities will use these resources. Expenditures should be aimed at increasing the efficiency of municipal services. In this context, investments should be made in priority areas, projects that will increase efficiency should be prioritized and waste of resources should be prevented. In addition, spending policies should be transparent and shared with the public so that the society can receive the services they expect from municipalities and participate in management processes. In this study, the revenue and expenditure policies of municipalities were examined by comparative analysis method and some determinations were made about how the municipalities' revenue and expenditure policies would be. In this context, the revenue and expenditure policies of municipal governments should be regulated in a balanced and fair manner to meet local needs, ensure sustainability and increase social welfare. Correct implementation of these policies will strengthen the effectiveness of local governments and their trust relationship with the society. Key Words: Local Administrations, Municipalities, Revenue Policies, Expenditure Policies, Participatory Budget Jel Code: E62, H71, H72

Combined strategies for green roof incentive policies in Lisbon: Evaluating the potentiality of concession grants and identifying priority intervention areas

Incentive policies to promote new technologies is a strategy often employed by policymakers and governments. In some cities worldwide, mechanisms to encourage the adoption of Green Roofs (GR) have been implemented over the years. Although GR is not a new technology, the use of incentives, such as subsidies and tax abatements and/or exemptions, is still a recent strategy in many countries. The study covered in this paper proposes to explore the potential of combined incentive mechanisms for green roofs, using direct incentives (financial subsidies) and indirect incentives (tax/fee rebates). The granting incentives were verified by the feasibility assessment from both private (saved money) and public perspectives (reduction in municipal revenue) using scenarios of abatement percentages for fees and taxes and combining direct and indirect incentives. In addition, priority intervention areas for the installation of green roofs were defined based on three parameters: (i) the proportion of existing green spaces, (ii) urban heat islands and (iii) the potential of the building stock for green roof retrofit. The results show that granting a combined solution can be an effective option for facilitating the implementation of green roof projects. Moreover, the study serves as a decision support guide for politicians, urban planners, and public managers to formulate incentive proposals and make well-informed decisions regarding the incentive policies for GR.

ANALYSIS OF THE SPATIAL-ECONOMIC AND SOCIO-PROFESSIONAL DYNAMICS OF TAXI-TRICYCLE DRIVERS IN LOME

African cities’ fast rate of population increase from 4 to 6% per year and the decline of organized public transport systems are the origin of the rapid development of non-conventional means of transport [2]. The city of Lomé, since its creation in 1897, has experienced growing demography and spatial extension apart from its socio-collective and mobility infrastructure [5]. Faced with the inability of public transport services to meet the demand, we are witnessing the emergence of informal transport solutions such as taxi-motorbikes and taxi-tricycles in response, not only to the demand but also to youth unemployment and the economic crisis. This article focuses on actors in the taxi-tricycle sector. It analyzes the spatial economic and socio-professional dynamics of taxi-tricycle drivers in Lomé. The scientific interest of this article is dual. Firstly, it makes it possible to map the spatial dynamics of taxi-tricycles in Lomé and, secondly, it identifies the problems related to the propagation of the phenomenon of urban taxi-tricycle transport which, until now, has not been apprehended by Togolese researchers. The methodology focuses on the analyses of data (primary and secondary) collected through a literature search, observations, and a survey. A sample of 47 individuals was selected, made up of 40 taxi-tricycle drivers and seven association leaders. The results show that the diffusion of taxi-tricycles is supported by the logic of marginality and informality. The sector contributes somewhat to solving the problems of mobility and unemployment as well as the increase in municipal revenues. Given the difficulties raised by this study, it is imperative that the sector be regulated by the State.

THE REVENUE SOURCES OF AIZAWL MUNICIPAL CORPORATION: TAX AND NON-TAX

Municipal corporations generate revenue from various sources to fund their operations and provide services to residents. Municipal revenue sources are broadly divided into - Tax and Non-tax revenue. Tax revenue includes property taxes, which is the collected from property owners, based on the assessed value of their properties. Non-tax sources of municipal revenue typically refer to revenue streams that local governments collect apart from taxes, such as, use fees and charges, licences and permits, fees and penalties, grants and find transfers, investment income, etc. Like other municipalities in India, especially, smaller municipalities, Aizawl Municipal Corporation (AMC) is heavily dependent on fund transfers from higher governments such as, the central and state governments. This is basically due to the limited revenue sources available to the Corporation. The AMC received funds primarily, through state tax devolution from the state government as recommended by State Finance Commission. The revenue resources of Aizawl Municipal Corporation include Own Revenues, consisting of Tax Revenues (of which the property tax is a major source) and Non-Tax Revenues such as funds for local bodies, grants and devolution by the State Government, Grants from the Central Government and Finance Commissions and other receipts. Data shows that the contribution of own source revenue is very small, less than one-third of total revenue expenditure in 8 of the last 12 years. The financial resources of the Aizawl Municipal Corporation play a critical role as engines for the growth of local bodies in the state. KEYWORDS: Revenue sources of municipalities, Tax and non-tax revenue of municipal corporations, AMC

CONTRIBUTION OF INFORMAL STREET VENDORS TO LOCAL GOVERNMENT REVENUE DURING POST-COVID 19 PANDEMIC

This paper discusses the contribution of informal street vendors to local government revenue generation during the COVID-19 pandemic. Informal street vendors usually develop businesses to sell something and earn an income. They not only generate their income but also generate revenue for the local government. The main objective of local governments is to maintain and improve their efficiency. Therefore, this study aims to understand how informal street vendors contribute to the revenue of Kubang Pasu municipal in the short term, especially after the COVID-19 pandemic. The study covers 50 street vendors in Kubang Pasu. The results of the study show that there are only two (2) independent variables that affect the dependent variable. First, the relationship between affordable licenses and Kubang Pasu Municipal’s revenue shows a positive (0.301) and significant (0.019) relationship at a 0.050 level of significance, which means that the more affordable licenses issued, the higher the Kubang Pasu municipal revenue. Second, the relationship between the current post-pandemic business situation and Kubang Pasu municipal’s revenue shows a positive (0.541) and significant (0.058) relationship at the 0.10 level of significance, which means that the more accessible the business situation is in the post-pandemic period, the higher Kubang Pasu Municipal’s revenue will be. The newly developed revenue source will secure local government revenues in the long term and avoid budget deficits. Kubang Pasu Municipal needs to create new revenue sources, as they are still among the local governments with low revenue sources compared to local governments in other states.

Factors Affecting Municipal Revenues and Expenses (Case Study: Tabriz Municipality)

The lack of a comprehensive perspective on municipal revenue sources within the framework of the country's macroeconomic system, alongside occasional interventions and the implementation of self-reliance and self-sufficiency policies for municipalities, has led to instability in the revenue sector of municipalities. The restriction of legal and reasonable avenues for generating municipal income has resulted in a heavy dependence on urban construction and the sale of excess building density. The continuation of this situation has created adverse effects and social, cultural, and infrastructural costs for urban management. Therefore, the present study aims to identify the factors affecting the revenues and expenses of Tabriz Municipality. The research is applied in terms of its purpose and descriptive-analytical based on a survey method using a structural modeling approach for data collection. The statistical population of the study consists of senior, middle, and operational managers, as well as experts from Tabriz Municipality, and a standard questionnaire was used to collect data. The results showed that legal solutions, the role of stakeholder groups (Ministry of Interior), the role of stakeholder groups (private sector), and the adoption of appropriate methods and provision of automated services have a positive and significant impact on the management of municipal revenues and expenses.

Allocation of Adult Day Care Services to Different User Groups: A Register-Based Cross-Sectional Study

The international policy of active ageing emphasises activities and social relations for long-term care recipients, for example through adult day care. Knowledge about who are allocated such services is, however, sparse. We aimed to investigate characteristics that contribute to determine allocation of adult day care for care recipients with and without dementia. This study selected all 250 687 individuals who received long-term care services on 31 December 2019 from the Norwegian Register for Primary Health Care. We added municipal level data from the Municipality-State-Reporting register and a national survey. Multilevel analyses comparing allocation of adult day care services to other services found that municipal clustering was around 20%. Care recipients who lived alone had higher odds of receiving adult day care, while the odds of receiving adult day care decreased as age increased. Disability level and gender were also significantly associated with allocation of adult day care, but in different directions for different user groups. As the unrestricted revenues of municipalities increased, the odds of allocating adult day care to people without dementia decreased. Other municipality characteristics did not significantly impact the allocation of adult day care. In conclusion, individual characteristics were more influential in allocation of adult day care than municipality characteristics, and the results uncovered clear differences between care recipients with and without dementia.

Effects of parliamentary amendments on municipal financing of primary health care in the Brazilian Unified National Health System

This study aims to analyze the effects of the expansion of the federal transfer of parliamentary amendments for municipal financing of primary health care (PHC) in the Brazilian Unified National Health System (SUS), from 2015 to 2020. A longitudinal study was conducted using secondary data on transfers of parliamentary amendments from the Brazilian Ministry of Health and expenditure of municipalities' own resources on public health actions and services and PHC. The effect of the transfer of parliamentary amendments on municipal financing was verified in a stratified way by population size of the municipalities, using generalized estimating equation models. The transfer of parliamentary amendments for PHC showed a large discrepancy in per capita values among municipalities of different population sizes. No correlation with municipal spending on public health actions and services was observed in municipalities with more than 10,000 inhabitants, and the association with spending on PHC (p < 0.050) was inverse in all municipalities. Therefore, the increase in the transfer of parliamentary amendments by the Brazilian Ministry of Health favored a reduction in the allocation of municipal revenues to PHC, which may have been directed to other spending purposes in the SUS. These changes seem to represent priorities established for municipal budget expenditure, which have repercussions on local conditions for guaranteeing stable funding for PHC in Brazil.

Fee for Reducing Natural Field Retention as an Instrument of Sustainable Public Finance

Theoretical background: Active national fiscal policy is an important determinant of sustainable development. Poland falls below the water security level, which is why natural retention is a particularly important issue, as the poverty of societies begins with a lack of access to water. This also poses a challenge for public finance, which should encourage specific behaviors. As of 1 January 2018, a fee for the reduction of natural land retention is levied in Poland. Purpose of the article: The aim of the article is to analyze and evaluate the fee for reducing natural field retention as an instrument of sustainable public finance and to assess its fiscal efficiency in terms of its ability to raise public revenue, in particular the revenue of municipalities on the example of cities with county rights in the Silesian Voivodeship. Research methods: The paper draws on literature reviews and the conducted empirical research. Data were collected using the direct method via access to public information. First, an analysis was carried out on the amount of revenue generated from the fee for reducing natural field retention, constituting the income of the State Water Holding – Polish Waters. Subsequently, an analysis was made on the amount of revenue generated from the fee for reducing natural field retention in municipalities with county rights in the Silesian Voivodeship. The study covered the years 2018–2022, i.e. from the introduction of the fee until the last year for which the data are available. Main findings: The fee for reducing natural field retention is a sustainable public finance instrument designed to shape attitudes and influence behavior. Although levying a fee for reducing natural field retention does not solve the problem of insufficient retention, it encourages discussion and implementation of measures to improve it. The mandatory fee is intended to discourage the construction of impervious surfaces and, at the same time, encourage property owners to incorporate retention systems into their construction plans to counteract the lowering of groundwater levels. It is of great importance, not in an economic or fiscal sense (public revenue), but rather in a social sense, by raising public awareness of the problem of natural retention.

MUNICIPAL FINANCES AND INSTITUTIONS IN PORTUGAL: THE CASE OF COIMBRA CITY COUNCIL (1557-1836)

ABSTRACTThis article aims to analyse the finances of the Coimbra city council from 1557 to 1836. Our objective is to examine the causes of long-term changes in municipal revenue and expenditure, particularly during the extended period of decline that occurred between the mid-17th century and the late 18th century. This study will focus on the composition of revenue and expenditure, as well as on revenue collection mechanisms. We aim to present the empirical data on the revenue and expenditure components that allow us to understand the changes that took place. Finally, we hope to be able to explain the causes that led to significant variations in revenue and expenditure in a dialogue with existing literature. The primary sources used correspond to municipal revenue and expenditure books, supplemented by other sources such as legislation, correspondence and auction books.

Enhancing local revenue with land and construction tax incentives: fair and balanced tax approaches

PBB-P2 tax (Land and Building Tax-Rural and Urban) and other valid sources provide local revenue. In article 10 of Regulation of the Minister of Finance of the Republic of Indonesia Number 208/PMK.07/2018 for the Assessment of Rural and Urban Land and Building Taxes, "The Regional Head determines the amount of NJOP (Tax Object Selling Value) of Land and Building every 3 (three) years, except for certain tax objects that can be determined annually in accordance with the development of the region." One technique to optimize PBB revenue is to update NJOP data. One way to enhance municipal revenue legally is with a tax stimulus. Empirical legal research uses induction reasoning to analyze primary and secondary data. The goal is to determine a lawful and compliant local tax optimisation policy. NJOP is significantly higher now. NJOP increases by 1–8 times. Through a mayoral regulation on PBB-P2 stimulus in 2023–2025, the Local Government hopes to reduce social turmoil by gradually increasing the value of the Land and Building Tax assessment.

The São Paulo State (Brazil) Ecological Fiscal Transfer: Distributive and environmental effects

To restore 12 million hectares of native vegetation in Brazil by 2030, aligning environmental policies with incentive measures is crucial. The Ecological Fiscal Transfer (known as Ecological ICMS in Brazil) allows states to redistribute the ICMS tax (similar to the Value Added Tax) revenue based on environmental criteria, likely motivating municipalities to take environmental action. São Paulo recently modified its ecological ICMS legislation, increasing the ICMS revenue distributed according to environmental criteria and introducing a new criterion for native vegetation cover. We assessed the impact of these changes on tax redistribution, considering three scenarios: the former rules (2021), the new rules (2025), and the new rules with 1.5 million hectares of vegetation restored (2042). While the pattern of ICMS distribution remained mostly unchanged, there were distributional effects. Some municipalities lost up to 5% of their initial revenue, while others with high socio-environmental importance doubled their revenues. Existing environmental criteria still lack incentives for local environmental policies. However, the new criterion for native vegetation cover could, with practical limitations, boost municipal revenue after restoring 1.5 million hectares. São Paulo's initiative to incorporate native vegetation cover into an Ecological Fiscal Transfer policy holds the potential to inspire similar tax-based environmental incentives worldwide. However, it must be adapted to motivate local governments to embrace restoration actions rather than serving primarily as a compensatory measure.

Can Florida’s Coast Survive Its Reliance on Development?

Problem, research strategy, and findings With its densely built coastline and economic and fiscal reliance on development, Florida is an extreme case of how climate change threatens both the built environment and urban land governance. We conducted one of the first statewide assessments of how sea level rise will affect Florida’s municipal revenues. We paired this with a statewide survey of coastal planners and managers to assess how they have been funding climate adaptation. We found that more than half of Florida’s 410 municipalities will be affected by sea level rise, exposing on average almost 30% of local revenues. Yet, though climate impacts will significantly stress local fiscal health, we found no relationship between cities’ prioritization of climate adaptation and their fiscal exposure. Takeaway for practice Municipal revenues will become increasingly eroded by climate impacts and market responses. More fiscally affected municipalities are comparatively smaller, Whiter, and wealthier. They may be better able to invest in near-term adaptations, but long-term sea level rise could erode local fiscal capacity to maintain infrastructure and protect local tax bases. These municipalities’ fiscal health and decline will affect regionwide housing markets, gentrification, and displacement. These dynamics underscore the need for stronger regional climate assessments and land and tax governance to overcome challenges facing coastal and near-coastal municipalities.

Transparency in Financial and Fiscal Affairs at Municipal Level: The Lessons from the Gandaki Province, Nepal

Transparency in Financial and Fiscal Affairs at Municipal Level: The Lessons from the Gandaki Province, Nepal