Legal conditions limiting fundraising capabilities of local self-government units. Status and original propositions concerning introduction of changes together with Bank Gospodarstwa Krajowego

Abstract

Reintroducing local self-governments in Poland was unquestionably a proper and necessary step in the transformation of the political and government system. Closing the civilization gap in municipal infrastructure will require a higher level of debt in local self-government units. Therefore, in practice efficient development of local self-government units in the future is affected by amendments to legal provisions related to the capacity and level of debt. Despite their need for funding of infrastructure investments, local self-government units rarely take advantage of public-private partnership. The Author of this paper believes that the perception of local public debt in Poland constitutes the justification of feasibility and necessity of implementing systemic changes, especially regarding limitations of local public debt. The purpose of this paper is to show the problems, which are caused by barriers related to limiting or assuming obligations or increasing fund management efficiency of local self-government units. Accepting solutions proposed by the Author would have a positive impact on the public finance sector, including the state budget and budgets of local self-government units. Such activities may therefore provide consolidation within one entity (Bank Gospodarstwa Krajowego) of management of bank accounts of local self-government units and increase of the capacity to raise funds, especially for infrastructure investments. Consolidation would have positive influence on short-term liquidity of local self-government units, while elimination of „qualitative” limitations and amendment of classification of expenses related to partially financing the PPP programme fees, would be more important in case of long-term fundraising for performing investment projects.