3.5 Financial Status of Municipalities

3.5 - Financial Status of Municipalities



Income tax is the part that goes to the Municipalities. Here you can see a  summary of the income tax in few municipalities in East Iceland since the year 2002.

Results

a) Changes of municipal income tax in selected municipalities in East Iceland




Figure 1:  Net municipal income tax in Fjarðabyggða and Fljótsdalshéraðb municipalities in the years 2003-2016 based on previous year income (click for bigger image).

a Fjarðabyggð in its current form was established in 2006 with the merger of Fjarðabyggð, Mjóafjarðarhreppur, Austurbyggð and Fáskrúðsfjarðarhreppur municipalities.  The results reported in Figure 1 for Fjarðabyggð in   the years 2003 – 2006 are the sums of net municipal income tax in these four municipalities.

b Fljótsdalshérað in its current form was established in 2004 with the merger of Austur-Hérað, Fellahreppur and Norður-Hérað municipalities. The results reported in Figure 1 for Fljótsdalshérað  in the years 2003 - 2004 are the sums of net municipal income tax in these three municipalities.



Figure 2: Net municipal income tax in Seyðisfjörður, Fljótsdalshreppur, Breiðdalshreppur and Djúpavogshreppur municipalities in the years 2003-2016 based on previous year income (click for bigger image).


Obs.  Review of this indicator in February 2014 revealed that the results for the years 2003 – 2008 published on the web, sustainability.is, were not obtained the same way as newer results.  Results for the years 2003 – 2008 were subsequently updated to ensure all figures come from the same column in the annual reports of the municipalities.  Click here to view the figures as they appeared before the update.


Updated: October 17 2016
Source: Samband íslenskra sveitarfélaga


b) Expenditure ratio

Figure 3 displays the expenditure/ income ration in A operation of selected municipalities in Mid East Iceland from 2002 - 2015. Value over 100% means that dues are more than income. Value under 100% means that dues are less than the income.


Figure 3: Municipal A operation expenditure/income ratio in East Iceland 2002 - 2015 (click for bigger image).


Click here to download table view of the data

Updated: October 17 2016
Source: Samband íslenskra sveitarfélaga Retrieved September 22 2016 from http://www.samband.is/media/arsreikningar-sveitarfelaga/Net_Rekstrarreikningur.xlsx


c. Contribution


 

Figure 4: Contribution margin in Icelandic krona (click for bigger image).



Figure 5: Contribution margin in given price level of the year 2015 (click for bigger image).





Figure 6: Contribution margin as a ratio of income (click for bigger image).


Updated: October 17 2016

Source: Samband íslenskra sveitarfélaga Retrieved september 22 from http://www.samband.is/media/arsreikningar-sveitarfelaga/Net_Rekstrarreikningur.xlsx

Metrics, Targets and Monitoring Protocol


What is measured?

  1. Changes of municipal income tax in selected municipalities (Project effect: indirect).
  2. Municipal income vs expenditure (including financial items), (Project effect: induced).

Targets:

  1. Not applicable.
  1. Balanced revenue/Expenditure ratio.


Monitoring Protocol:

Municipalities in East Iceland will make this data available annually.


Changes of indicator

At the initiative's annual meeting on May 3 2016 the following change was approved:

What is measured?

Text before change
Text after change
  1. Changes of municipal income tax in selected municipalities
  2. Municipal income vs expenditure (including financial items)
  1. Changes of municipal income tax in selected municipalities
  2. Municipal income vs expenditure (including financial items)
  3. Municipal gross margin in East Iceland
  4. Municipal debt level in East Iceland
Rationale for change: 

This indicator was discussed during teamwork session at the initiative's annual meeting 2015.  The conclusion was to keep criterions a and b unchanged but add municipal gross margin and municipal debt.


It was decided in the forth phase of the initiative to change the numbers of the sustainability indicators.  This indicator was originally number 15.1 and is referenced as 15.1 in early documents of the project.


The criterion for part a was originally defined as:  "The ratio of total municipal revenue that came from the construction and operation of Fljótsdalsstöð power plant and Fjarðaál smelter".  When monitoring started in 2005 the criterion was changed to "Changes of municipal income tax in selected municipalities".  The reason was that information was unavailable for the former criterion but the revised one is available in yearbooks of municipalities.

Rationale for Indicator Selection


The Fjardaal and Karahnjukar projects will likely increase revenues from municipalities through increased income and property taxes from direct and indirect employment in the area.

The municipalities' expenditure, however, will also likely increase as the additional employees, their families, and others attracted to the local area require municipal services.

The main services which must be discharged by the municipalities according to Icelandic law are:

  • Social services
  • Technical services
  • Education, culture, sports and recreation
  • Infrastructure, environment, and planning
  • Operation of harbors (where appropriate)
  • Water works, district heating systems, and other utilities


Baseline

Municipality in East Iceland: Income and cost 2002


In this order: Municipality, income, cost, ratio of income and cost.

Source: Samband íslenskra sveitarfélaga from http://wayback.vefsafn.is/wayback/20070502142513/http://www.samband.is/files.asp?ID=1225