Own income potential and debt of urban communes in Wielkopolska province

Abstract

In comparison with other administrative types the analysis of urban communes’ budgets provides grounds for a positive assessment of their income situation, as the majority of their total income is made up of their own. On the other hand, growth detrimental changes in the demographic and social makeup of towns, resulting from suburbanization and population aging, have a negative impact on their income structure. The consequence of these processes may be a decrease in their financial self-sufficiency and, as a result, a reduction in their socio-economic development. Demographic and social change also forces local authorities to make efforts and ensure that towns remain attractive and adapt to new expectations of their residents. This in turn translates into increasing investment expenditures and often indebtedness. The aim of the research was to diagnose changes of own income potential and indebtedness of Wielkopolska province communes in the years 2005–2016. The survey drew on data from the Central Statistical Office and the Ministry of Finance for 226 communes of Wielkopolska province, among which were 19 urban communes, including 4 communes with county rights (Kalisz, Konin, Leszno and Poznań). The research found that in the period 2005–2016 the level of own income potential as well as the level of own income per capita increased in urban communes. However, due to the lower average annual growth rate of own income potential compared to the total income growth rate, the importance of own income potential in financing the activities of urban communes has decreased. Among the studied types of communes, debt service was the one which most heavily burdened the own income of Poznań and other cities with the rights of county