世界银行-反思市政财政_保加利亚地方公共财政评论（英）-2025_83页_1mb

Bulgarian Local Public Finance Review: Analysis and Summary

Key Revenue Insights

1. Own-source Revenue Limitations: Local governments rely heavily on central transfers (54% of municipal revenues in 2023) due to low tax autonomy. Key taxes like recurrent real estate tax and vehicle tax struggle to keep pace with GDP growth, exacerbated by outdated tax assessment formulas and narrow environmental components in taxation.
2. Urban vs. Rural Disparities: Tourist and mining municipalities (e.g., Nessebar, Chelopech) show stronger revenue autonomy, but smaller towns lag in both revenue and expenditure capacity. A significant funding gap exists in road infrastructure, with units costing up to BGN 306 per ton for waste management in Sofia (difference of 3-4x from market prices).

Transfer System Challenges

1. Conditional Transfers: Current transfers for delegated activities (e.g., education, healthcare) lack performance-based metrics, leading to inefficiencies.
2. Fiscal Gap Methodology: Bulgaria’s equalization transfers are overly complex and formula-driven, missing capital needs. Simplifying with a standardized fiscal gap approach could better address horizontal imbalances.

Expenditure Efficiency and Equity

1. Unit Cost Variations: Larger municipalities benefit from cost efficiencies in waste management and road maintenance, while small towns spend disproportionately more per outcome (e.g., kindergarten care costs in Makresh).
2. Deficit in Public Services: With 58% of roads in poor condition, deficiencies reflect underfunding and static tax assessments.

Policy Recommendations

1. Revenue Enhancement:
   • Adopt mass valuation models to update real estate tax assessments, ensuring alignment with market trends.
   • Align vehicle taxes with CO₂ emissions and introduce incentives for e-vehicles.
2. Transfer Optimization:
   • Shift to performance-based transfers for delegated services and consolidate unconditional equalization grants.
   • Reforms should include a higher share of balanced transfers, replacing earmarked and unplanned funds.
3. Spending Efficiency:
   • Promote digitalization and public-private partnerships (PPPs) for infrastructure to reduce costs and improve delivery.
   • Link value-for-money cuts with administrative capacity building, especially in small municipalities.

Conclusion: Strengthening local revenue autonomy, simplifying transfers, and improving spending efficiency through data-driven reforms can enhance public service delivery and fiscal equity in Bulgaria.