Financing Municipal Tasks in Slovenia

  • Boštjan Brezovnik Associate Professor, Faculty of Law, University of Maribor, Slovenia
  • Žan Jan Oplotnik Faculty of Economics and Business, University of Maribor, Slovenia
  • Franjo Mlinarič Assistant Professor, Kozminski University, Department of Finance, Poland
  • Srečko Aleksander Padovnik Municipality of Sveta Trojica v Slovenskih goricah, Slovenia
  • Mateja Finžgar Ph.D Student, Faculty of Economics and Business, University of Maribor, Slovenia
Keywords: local self-government, municipalities, fiscal decentralisation, municipal tasks, Slovenia


The paper examines whether the system implemented for financing local communities
(municipalities) in Slovenia in the period 2010-2016 is compliant with the
European Charter of Local Self-Government. We examined the cost coverage for
performing the tasks of municipalities, the cost structure and the rate of interconnections
between the budgeted funds under the eligible expenditure mechanism
and the data collected on costs by municipality. Our hypothesis states that the
principles whereby funding would be commensurate with tasks were not fulfilled
in the period between 2010 and 2016 in the Republic of Slovenia given that the
average per capita costs exceeded the funding under eligible expenditure. The
discrepancy had increased from the previously examined period of 2007-2009.
The findings show that although the principles of the European Charter of Local
Self-Government have been satisfactorily included in the country’s laws, certain
discrepancies have been found with regard to funding where the principle of
municipal funding had not adequately been taken into account to ensure that
funding is commensurate with the tasks. Between 2010 and 2016, municipalities
received less funding than the scope of their tasks would require. The situation
deteriorated in 2010–2016with respect to the 2007–2009 period when the
existing funding model was introduced. The municipal funding model should
be improved so that the eligible expenditure calculation takes into account in
real time the real costs needed to perform the tasks of local communities; and the
cost structure should be made more homogeneous. The model should be changed
to consider and enable the performance of development tasks of municipalities
through investments.