Rethinking Municipal Finance

The report provides a comprehensive analysis of Bulgaria's local public finances, focusing on key challenges faced by municipalities and potential reforms. The report's goal is to provide a better understanding of local fiscal capacity, the system of intergovernmental fiscal transfers, and municipal spending and discusses possible policy options that can help strengthen municipal finances. More specifically, it seeks answers to the following key questions: How can municipalities boost their own-source revenue-with a focus on property taxes - to generate more resources for better and more equitable local service delivery? Is there scope to optimize the intergovernmental fiscal transfer system, particularly equalization transfers, to enhance efficiency and equity based on global best practices? How can local spending efficiency and effectiveness be improved to achieve value for money in municipal services?