Municipal budgets should become an instrument for sustainable development

In the areas of KLGi, the analysis on the overall municipal budget and the operating lines in relation with expenditure budgets were presented by the Executive Director, Mr. Besnik Tahiri and the Manager of Programs, Mr. Besnik Muçaj. Special emphasis was put on the comparative aspect of budgetary trends and development prospects and also the challenges, successes and perspectives in relation to the collection, management and spending of funds by municipalities.

Initially it was stated that the Law on Local Finance and other laws that regulate local government come as a result of the decentralization process in 2008. Due to the high and in-depth approach of monitoring and supervision, these laws were considered to be very practical at that time, as a need of mentoring and supervision.

Whereas, 8 years later, this law and other laws related to municipal development should be re-looked and re-thinked in order to make improvements, because on the contrary, the municipalities will continue to be seen as a “poor student.” As a result, there is a need to change the framework of the law on local finances and revise the legislation, given that municipalities now have greater autonomy and a non-adequate funding directly affects their functioning.

Furthermore, it was emphasized that decentralization can be successful and the municipal system can function only if there is proper and sustainable funding. Among other things, it should be noted that only 18% of the municipal budget comes from their own revenues, the rest coming from the central level. That is, there is a great dependence on the central level and certain ministries. At the end, the recommendations on measures that should be taken in relation to better management and a new approach of funding were reflected.

Recommendations are as follows: Law on local finance should increase the fiscal autonomy of municipalities; An analysis of primary and secondary legislation should be done in order to harmonize the competences and finances; Budget Circulars should adapt to time - returning into a mechanism for sustainable development; We should look at new financing opportunities and finally, the process of drafting the Law on balanced regional development should be taken into account by reducing the regional development gaps.