Analysis of the Financing of Local Communities in Slovenia in Times of Economic Downturn and Crises

Authors

  • Tatjana Horvat University of Primorska, Faculty of Management
  • Veronika Šart Municipality of Prevalje
  • Gorazd Justinek New University, Faculty for Governmental and European Studies
  • Vito Bobek University of Applies Sciences FH Joanneum

DOI:

https://doi.org/10.4335/19.3.751-780(2021)

Keywords:

municipality, budget, statement of revenue and expenditure, fiscal balance act, austery measures, wages

Abstract

Based on the sample of all municipalities in Slovenia from 2008 to 2014, the authors answered how austerity measures affect the expenditure side of the revenue and expenditure account of municipalities. The authors used a statistical program to process the data. The research intends to anticipate timely action in the next economic crisis. The results showed that the austerity measures represent a reduction in annual holiday pay abundantly visible in the first year. Other savings measures in wages and expenses for employees are less visible in the first year and more visible in the following years. There is a positive correlation between the variables payroll and other employee expenditure and the number of employees. The authors propose to change the legislation in the area of financing of municipalities.

References

AJPES - Agency of the Republic of Slovenia for Public Legal Records and Related Services (2008-2014) Annual Reports, available at: www.ajpes.si/jolp (December 19, 2020).

Bird, M. R. & Vaillancourt, F. (1998) Fiscal Decentralization in Developing Countries, available at http://www.devecon.cn/upload/200872593124779.pdf (November 6, 2020).

Bračlija, I. (2012) Uvodna misel, Lokalna demokracija 4, Aktualni problemi slovenske lokalne samouprave (Maribor: Inštitut za lokalno samoupravo in javna naročila).

Brezovnik, B. & Oplotnik, Ž. (2003) Mednarodna primerjava sistemov financiranja občin, Lex localis – Journal of Local Self-Government, 1(3), pp. 1–38.

Brezovnik, B., Oplotnik, Ž. & Finžgar, M. (2015) Financiranje slovenskih občin (Maribor: Inštitut za lokalna samoupravo in javna naročila Maribor).

Buterin, V., Škare M., & Buterin D. (2017) Macroeconomic model of institutional reforms' influence on the economic growth of the new EU members and the Republic of Croatia, Economic Research-Ekonomska istraživanja, 30(1), pp. 1572–1593, https://doi.org/10.1080/1331677X.2017.1355260.

Cilibiu, M. O. (2014) The principle of local financial autonomy, Annals of the Constantin Brâncuși, 2014(2), pp. 41-45.

Clark, T. N. & Ferguson, L. C. (1983) City money: Political processes, fiscal strain and retrenchment (New York: Columbia University Press).

Cohen, N. R. (1989). Municipal Default Patterns: An Historical Study. Public Budgeting & Finance, 9(4), pp. 55-65.

Cvikl, M. M. & Korpič Horvat, E. (2007) Proračunsko pravo - Public Law (Ljubljana: Gospodarski vestnik).

Čok, M., Rupel Prevolnik, V., Stanovnik, T. & Cirman, A. (2002) Javne finance v Sloveniji (Ljubljana: Ekonomska fakulteta).

Devas, N., Manuawwar, A., Delay, S., Koranteng, O. R. & Venkatachalam, P. (2008) Financing Local Government (Paris: OECDiLibrary), available at http://s3.amazonaws.com/academia.edu.documents/42081561/Financing_local_govt_full_text_typesetted.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1495000155&Signature=1XQGWOi7kvmbE%2F1%2F4L4LIncgAFk%3D&responsecontentdisposition=inline%3B%20filename%3DIntroduction_Financing_Local_Government.pdf (September 29, 2020).

Deželan, T., Maksuti, A. & Uršič, M. (2014) The capacity of Local Development Planning in Slovenia: Strengths and Weaknesses of Local Sustainable Development Strategies, Lex localis – Journal of Local Self-Government, 12(3), 547–573.

Dirsehan, T. & Can, C. (2020) Examination of trust and sustainability concerns in autonomous vehicle adoption, Technology in Society 2020, 63, pp. 1-6, https://doi.org/10.1016/j.techsoc.2020.101361.

Djurić Drozdek, V. & Bojnec, S. (2010) Financiranje obveznih nalog občine (Koper: Fakulteta za management).

Kamer, P. M. (1983) Crisis in urban policy finance: A case study of 38 cities (New York, N.Y. : Praeger).

Klun, M. (2006) High level of centralization and local debt in Slovenia (Ljubljana: Fakulteta za upravo).

Kolenc, N. (2008) Finančna avtonomija lokalne samouprave v Sloveniji (Ljubljana: University of Ljubljana – FDV).

Kotarba, B. & Kolomycew, A. (2014) Financial independence of local government units in Poland, Journal of Universal Excellence, 3(4), pp. A18–A35.

Kukovič, S., Haček, M. & Bukovnik, A. (2016). The Issue of Local Autonomy in the Slovenian Local Government System, Lex localis - Journal of Local Self-Government, 14(3), pp. 303–320.

Ladd, F. & Yinger J. (1989) America's ailing cities: Fiscal health and the design of urban policy (Baltimore, MD: The Johns Hopkins University Press).

Milunovič, V. (2012) Sistem financiranja subnacionalnih ravni oblasti, Lokalna demokracija. 4, Aktualni problemi slovenske lokalne samouprave (Maribor: Inštitut za lokalno samoupravo in javna naročila).

Ministry of Finance of Republic Slovenia – Ministrstvo za finance RS (2015) Izračuni primerne porabe občin in izračuni finančne izravnave. (Ljubljana: Ministrstvo za finance RS, Direktorat za proračun, Sektor za sistem financiranja lokalnih skupnosti), available at: http://www.mf.gov.si/si/delovna_podrocja/lokalne_skupnosti/izracuni/izracuni_primerne_porabe_obcin_in_zneskov_financne_izravnave/primerna_poraba_obcin_dohodnina_in_financna_izravnava_za_leto_2015 (June 19, 2018).

Ministry of Finance of Republic Slovenia - Ministrstvo za finance RS (2015) Število prebivalcev po občinah (Ljubljana: Ministry of Finance of Republic Slovenia - Ministrstvo za finance RS), available at http://www.arhiv.svlr.gov.si/si/delovna_podrocja/podrocje_lokalne_samouprave/obcine (June 3, 2018).

Morgan, D. R & England, R. E. (1983) Explaining Fiscal Stress Among Large U.S. Cities: Toward an Integrative Model, Policy Studies Review, 73, pp. 73-74.

Oplotnik, Ž. & Brezovnik, B. (2014) Načelo sorazmernosti virov financiranja z nalogami slovenskih občin (Maribor: Inštitut za lokalno samoupravo in javna naročila).

Parshall, L.K. (2020) The Municipal Fiscal Crisis: Are Local Government Consolidation or Dissolutions Likely to Increase? Rockefeller Institute of Government, available at https://rockinst.org/blog/the-municipal-fiscal-crisis-are-local-government-consolidation-or-dissolutions-likely-to-increase/ (May 15, 2021).

SAOP (2012) Regres za letni dopust (Ljubljana: SAOP), available at http://www.saop.si/poslovne-informacije/podatki-za-obracun-in-opomniki/regres-za-letni-dopust/regres-za-letni-dopust-javni-sektor (July 1, 2018).

Škare, M. & Tomic, D. (2014) Examining the link between innovation, productivity, and growth: A global view, Amfiteatru Economic Journal, 16(36), pp. 606-624.

Špaček, D. & Dvořákova, P. (2011) Impact of Economic Crisis on Municipal Budgets in the Czech Republic, European Research Studies, 14(1), pp. 29-44.

Šuster Erjavec, H. & Južnik Roter, L. (2012) Analiza podatkov s SPSS (Celje: Fakulteta za komercialne in poslovne vede).

Thalassinos, E., Zampeta, V., Deceanu, L. & Pintea, M. (2010) New Dimensions of Country Risk in the Context of the Current Crisis: A Case Study for Romania and Greece, European Research Studies, 13(3), pp. 225-236.

Vlaj, S. (2012) Procesi in izzivi regionalizacije Slovenije, Lokalna demokracija. 4, Aktualni problemi slovenske lokalne samouprave (Maribor: Inštitut za lokalno samoupravo in javna naročila).

Zakon o ustanovitvi občin ter o določitvi njihovih območij (ZUODNO) (The Official Gazette of the Republic of Slovenia, No. 60/94, 108/2006, 9/2011 in 31/2018).

Zakon o financiranju občin – Municipal Finance Act (The Official Gazette of the Republic of Slovenia, No. 123/06, 57/08, 36/11, 14/15 – ZUUJFO, 71/17, 21/18 – popr. in 80/20 – ZIUOOPE).

Zakon o javnih financah (2011) (The Official Gazette of the Republic of Slovenia, No. 11/2011, pp. 1103-1125.

Zakon o ratifikaciji Evropske listine lokalne samouprave - Act on the Ratification of the European Charter Local Self-Government (The Official Gazette of the Republic of Slovenia, No. 96/ 57, p. 285).

Zakon uravnoteženju javnih financ – Public finance Balancing Act (The Official Gazette of the Republic of Slovenia, No. 40/2012, pp. 4227-4255).

Published

2021-07-22

Issue

Section

Article