Local government finance
Resourcing local government remains a central challenge to effective decentralisation. This section has content relating to different models of fiscal decentralisation, options for identifying new sources of local revenue, such as local property tax; and strategies for improving collection and deployment of own-source revenue. It also offers information about improving the borrowing potential of local government, innovative financing models such as municipal bonds, shared services, and public private partnerships.
- Fiscal decentralisation
- Financial management
- Innovative financing models
- Local/own-source revenue generation
- Financing infrastructure
- Public private partnership
- Green finance
- Property tax
On the afternoon and evening of July 8, 2013, heavy rains flooded parts of Mississauga, disrupting the lives of residents and damaging public and private property. The stormwater management system in the city proved inadequate to meet the levels of runoff experienced on that day. Mississauga is not the only city in this situation. In 2007, the Federation of Canadian Municipalities estimated that the stormwater management infrastructure deficit across Canada stood at approximately $31 billion. The Ontario Ministry of Public Infrastructure Renewal (now the Ministry of Economic Development, Employment and Infrastructure) estimated in 2005 that between 2005 and 2020, water infrastructure needs in the province would require investments of $28 billion for capital renewals, $12.4 billion to reduce asset and project backlogs, and $10.1 billion for growth. Stormwater management infrastructure controls the quality and quantity of stormwater that reaches water bodies and protects the health, safety, and sustainability of public and natural environments. The July 8 storm highlighted the need to direct significant amounts of financial and political capital towards municipal infrastructure management. This paper evaluates the financial tools available to fund stormwater infrastructure (property taxes, development charges or cash-in-lieu payments, grants, borrowing, and user charges), and proposes user charges as the most appropriate. User charges are fees earmarked to specific projects or services. They are based on a benefits-received principle, and are considered a fair form of revenue, because the beneficiaries of a service are directly charged for their consumption of that service. Further, user charges are a dedicated and stable funding source based on clear objectives related to the city’s stormwater infrastructure needs. None of the alternative funding tools offers the same combination of stable and predictable revenues and fair pricing. The paper also describes how the City of Mississauga is currently implementing a user charge dedicated to stormwater management, with billing introduced in early 2016.
Author: Daniella Dávila Aquije Publisher: University of Toronto Publication year: 2016
This paper looks at the City of Toronto’s 2008 Land Transfer Tax (LTT) and its impact on housing sales in the Greater Toronto Area (GTA). Housing sales declined in Toronto in 2008 where the LTT was implemented, but sales also declined in Toronto’s suburbs and in other cities, such as Vancouver and Montreal, where the LTT shouldn’t have had any influence. It was not just the LTT, but the recession in 2008 that contributed to housing market declines across Canada and beyond. This paper builds on previous research by including condominiums in addition to single-family homes in the analysis, accounting for the additional influence of the recession, and comparing the decline in sales in Toronto to the relative increase in sales in the suburbs.
Author: Murtaza Haider, Amar Anwar, Cynthia Holmes Publisher: University of Toronto Publication year: 2016
Democratic decentralisation through ‘conventional’ institutions of local government is facing increasing challenges, whether from financial pressures, questions of representativeness, difficult central-local relations and from a perhaps growing belief that local government has failed to realise its potential and there may be better ways of achieving societal goals. It is clear there is need to contemplate quite radical change to ensure local government becomes or remains ‘fit for purpose’. This collection of papers illustrates the way in which the role of local government is evolving in different parts of the Commonwealth and provides practical examples of new local government at work. It showcases emerging practice, and highlights success stories from new ways of working and challenges confronting local government in both developed and developing countries. New Century Local Government makes a very valuable contribution to helping understand the changing role of local government, and will ensure that practitioners are up-to-date with the most innovative initiatives in local government planning and administration.
Author: Graham Sansom and Peter McKinley Publisher: Commonwealth Secretariat Publication year: 2016
All activities of local government in South Africa are tightly regulated. There are numerous Acts governing how municipalities need to run operations. Municipalities are challenged by not having effective and efficient systems, tools, and processes to support managing their operations. This ultimately impacts on their ability to being able to effectively and timeously monitor their performance against their annual plans. However, the Sedibeng District Municipality was on a manual system that had a negative impact on its effectiveness and productivity. Sedibeng therefore needed to implement a performance management system that would comply with South African legislative requirements. The municipality went on an open tender and awarded the project to Microsoft partner Vision Activ that specialises in performance management solutions for both the corporate and public sectors.
Author: Microsoft CityNext Publisher: Microsoft CityNext Publication year: 2016
This resource guide provides practical guidance for designing, implementing and evaluating decentralisation reforms and local government practices to ensure they are as effective as possible. It also synthesises and presents current debates on the impact of decentralisation and local government on poverty reduction, service delivery and conflict as well as providing links to cutting-edge research and recent case studies.
Author: Zoe Scott and Munawwar Alam Publisher: Commonwealth Secretariat Publication year: 2011