H7 - State and Local Government; Intergovernmental RelationsReturn

Local government reform is a long-standing topic that appears in regular four-year election cycles. In general, the systems of connecting municipalities are presented in the form of voluntary - bottom-up approach or central - top-down approach. The aim of this paper is to assess the views of mayors elected in the 8th election cycle on merging current municipalities and consolidation reform. On a sample of 448 mayors across Slovakia, we focused on the impact of current events and views on the feasibility of measures that would lead to the consolidation of the number and more efficient self-government in Slovakia. The results of the research indicate a persistent reluctance to merge, the representatives do not find significant advantages in merging, on the contrary, in smaller municipalities with less than 500 inhabitants, there is a fear of losing investments in favor of a larger municipality.

Financial stability of municipalities is an important aspect for long-term sustainable development and disproportionate debt can generate risks for their standard functioning. Although there are many methodologies for assessing the financial stability and health of municipalities, they are usually based on central government needs and are not used for financial management and planning. The aim of the article is to develop a set of indicators for assessing financial stability and health for needs of municipalities by using publicly available information. The selected indicators highlight two basic assumptions important for short and long-term budget balance and sustainability of funding. Concretely, the balance of the current budget should always be positive and the maximum debt service should not exceed the surplus of the current budget. The set of indicators includes three groups of indicators: budgetary management, indebtedness and liquidity. There is a clearly defined and interpretable assessment for each indicator in terms of financial stability and potential risk.