Total financial resources available to municipalities for 2020 recorded a value of ALL 90.9 billion, an increase of about 11.6% compared to a year ago, according to official data from the Ministry of Finance, published within the project "Local Finance", funded by SECO (Secretariat for Economic Cooperation of the Swiss Government). 

Financial resources include revenues collected by municipalities themselves from taxes and fees as well as conditional and unconditional transfers from the central budget. This money is then spent by municipalities for their own administrative needs (salary or other current expenses) as well as for capital and other investments (education, kindergartens, etc.). 

The municipalities of Peqin, Shkodra, Shijak and Vau i Dejes resulted in the lowest level of per capita income, while in contrast the Municipalities of Dropull, Himara, Kolonja, Finiq, Këlcyra and Libohova had the highest financial resources per capita. 

In 2020, the total financial resources per capita in the Municipality of Dropull were ALL 95,459 with an increase of almost 50 percent compared to 2019, followed by the Municipality of Himara with ALL 77,180 per capita, Kolonja with ALL 64,479 per capita. In contrast, the municipality of Peqin had ALL 10,458 total financial resources per capita in 2020 with a decrease of 2 percent compared to 2019. 

The municipality of Shkodra had this indicator ALL 12,278, the second with the lowest level of financial resources per capita. The Municipality of Shijak was the third among 61 municipalities with low financial resources with only ALL 12,519 per capita. Official data show that, during 2020, the largest annual increase of financial resources was observed in the municipality of Finiq with 104%, in the municipalities of Kolonjë 61%, Kurbin 59%, Dropulli 50%, Rrogozhina 47%. 

On the contrary, the financial resources per capita in 2020 compared to 2019 suffered the largest decrease in the Municipality of Vora with 44%, Vauja dejes with 37%, Konispol 27%, Fushë Arrësit with 21%, Patos 19%, Memaliaj 18.8 %, Tropoja 16.7%, Shkodra 15.8%. 

If those categories considered destination (conditional transfers) were excluded from the total financial resources, the revenues over which the municipalities exercise authority and have decision-making rights marked a value of about ALL 52 billion, increasing by about 0.2% in annual terms. Declining developments in revenues from own domestic sources contributed negatively to the overall performance of total financial resources in 2020. For 2021, this revenue category presents higher uncertainties compared to other categories (intergovernmental transfers). 

Financial resources on which municipalities have relative freedom of use at the end of 2020 represented about 57.2% of total financial resources and include own-source revenues (26.6%), unconditional and sectoral transfer revenues (28.1%) and revenues from segregated taxes (2.5%). Conditional transfers increased by about 6.5 percentage points their share in the total financial resources of municipalities at the end of 2020. 

In 2020, the direction of developments in the performance of municipal financial resources was broadly determined by the marked increase in revenues from conditional transfers which contributed by about 11.5 percentage points to the annual growth of financial resources. This item is estimated to have a positive impact on the increase of financial resources of municipalities during the first half of 2021 (increase in the payment of economic assistance and disability). In the same direction, although to a lesser extent (1.1 percentage points), revenues from unconditional and sectoral transfers also contributed.

(Source: Monitor)