Municipal finances matter: new report shows slight increase during 2019

Press release, 10.06.2020

An annual report on local finances presented today shows a strengthening role of local government in cooperation with the central government, and points at inequalities among 61 municipalities

Swiss Ambassador in Albania Adrian Maître speaking at the webinar on local public finances.
Swiss Ambassador in Albania Adrian Maître speaking at the webinar on local public finances. © FDFA

Friday, June 5th - Through a webinar Co-PLAN - Institute for Habitat Development - presented the Local Public Finances Report 2019 funded by LëvizAlbania – a project of the Swiss Agency for Development and Cooperation SDC.  

Swiss Ambassador Adrian Maître greeted the presentation and said: ”It is encouraging to see in this report that in 2019 the fiscal autonomy of municipalities has increased. Also for 2019, we have evidence for a   continued increase in municipal revenues from unconditional transfers and from own tax revenues. Against the difficulties caused by the earthquake at the end of 2019, this increase in financial indicators is no small achievement”.

Over 60 participants were present including public finance experts, academics, local government representatives, and representatives from the EU Delegation, UNDP, and OSCE. The report’s key findings were presented by Co-PLAN expert Dr. Merita Toska followed by a discussion  on how municipalities have made use of available financial resources to improve local public services.

A main finding from the report is the improved performance of municipalities in terms of revenues: own tax revenues increased by 9.1% and shared tax revenues increased by 15% compared to 2018. Increased revenues came also from unconditional, general and sectoral transfers. On the other hand, the report warns about differences and inequalities among various municipalities: a high concentration of revenues in the municipality of Tirana, and lower capacities on the part of other smaller municipalities to raise revenue and therefore to provide public services.

The report looked also at how municipalities spend their funds and confirmed an increase in expenditures from own funds. However, the report finds that expenditures on personnel, operations and ‘other’, are higher than capital investments.

Since 2015 this report is measuring the impact of the territorial and administrative reform on municipal finance management, providing continous and comparable information on the performance of local public finance after the reform.

The webinar was hosted by Co-PLAN in the framework of the project “Municipal Finances and Citizen Perception on Local Services” with the financial support of LevizAlbania, a Project of Swiss Agency for Development and Cooperation, SDC.