GOLD Report I - UCLG

EUROPE144United Cities and Local Governmentsview, is equivalent to receiving grants(transfers). The only difference is that thelocal authority’s allocation is sometimescalculated on the basis of local tax revenue.For example, in Germany, the municipalshare of income tax is related to the localyield of the income tax; the idea here isthat the taxpayer is supposed to be pleasedknowing that part of their tax is helpingfinance local public services. Even so, theirelected representatives have no say in settingthe tax rates and there is no connectionbetween the rate of taxation and thenumber and quality of services provided.The differences among the various Europeanlocal government finance systems stemfrom their different sources of local budgetresources. All draw in particular on own taxrevenue, on various kinds of grants, onshared taxes and on revenue from servicedelivery. However, they diverge in the dif-Chart 3Structure of local budget resources: own tax revenue and grants or shared taxes0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1Albania (2005)GermanyAustriaBelgiumBosnia and HerzegoviniaBulgaria (2005)Croatia (2005)DenmarkSpainEstoniaFinlandFranceGreeceHungaryIrelandIcelandItalyLatviaLithuaniaLuxembourgMontenegro (2005)Norway (2003)NetherlandsPolandPortugalCzech RepublicRomaniaUnited KingdomSlovak RepublicSloveniaSwedenSwitzerland0%1%3%5%7%8%8%10%14%15%15%13%14%13%18%18%19%22%23%21%22%24%27%26%31%34%32%32%36%35%36%33.50%32%38%40%47%51%42% 45%62%58%61%42%42%43%45%46%44.35%50%55%55%57%57%57%60%61%61%64%67%70%71%73%78.30%88%Tax shares + general grant as % of the total incomeOwn tax revenues (= tax revenues subject to a localtax power) as % of the total incomeSource: DEXIA 2002, Council of Europe, 2003 or 2005.