Open-Ended Informal Consultative Meetings Panel on

Transcript:Open-Ended Informal Consultative Meetings Panel on:
Open-Ended Informal Consultative Meetings Panel on Municipal Finance & Local Fiscal Systems Presenter: Lourdes German Co-Lead Organizations: The Lincoln Institute of Land Policy & The World Bank New York, April 2016 AGENDA The Challenges Cities Face Priority Areas & Key Items for The New Urban Agenda in Municipal Finance Examples & Discussion Conclusion & Thank You Policy Unit 5 co-leads George W. Mac McCarthy Lincoln Institute of Land Policy Roland White The World Bank I. THE CHALLENGES CITIES FACE II. MUNICIPAL FINANCE & THE NEW URBAN AGENDA Vision & Framework Cities face increasingly complex responsibilities, complicated by chronically insufficient funding & capacity constraints. Approximately 6% of GDP ($5 Trillion USD) is estimated as necessary to pay for the urban infrastructure to support 2.5 billion in population growth expected in cities. A framework is needed to promote fiscal health & advance inclusive, safe, and resilient cities - Sustainable Development Goal (SDG) 11 – with participation at all levels – national, state, and local governments. ELEMENTS & PRIORITIES Sound fiscal performance of local governments rest on: The Rules of the Game Expenditures Revenues Financial management Borrowing Special Issues: Climate Finance Public Private Partnerships Rules of the Game Municipal finance systems rest on the policies, regulations and laws that create the enabling framework for fiscal governance Systems that define a municipality’s powers and responsibilities vary world-wide (Federal, Unitary, etc.) Most relevant are policy recommendations in the realm of fiscal decentralization: when local governments are tasked with carrying out decentralized functions with expenditure requirements, there must be a concomitant devolution of financial resources. Expenditures One of the biggest expenditure challenges facing governments is the growing gap in infrastructure funding and financing. Increasing the efficiency of local government spending begins by holding local government officials accountable for the provision of quality public services while operating within a fixed budget constraint. Priority Areas for Policy Reform Include: Higher level governments can create incentives of local officials to improve expenditure efficiency Aligning work of spatial and economic development planners and public finance can achieve capital expenditure efficiency Measures to strengthen local government accountability in expenditures Measures to exploit service delivery based on economies of scale REVENUES Majority of local government revenues come from intergovernmental transfers to fund operations & capital Own Source revenues are the second major component of revenues & typically originate from charges, user fees, or property taxes INTERGOVERMENTAL TRANSFERS The essential purpose of fiscal