3.5 Financial Status of Municipalities

3.5 - Financial Status of Municipalities



Municipalitie 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 in price level index for 2016.

Results

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


Changes of municipal income tax in selected municipalities in East Iceland

Figure 1:  Net Municipal income tax (without Equalizing fund) in Fjarðabyggða and Fljótsdalshéraðb municipalities in the years 2002-2016 in price level index for 2016.

a Fjarðabyggð in its current form was established in 2006 with the merger of Fjarðabyggð, Mjóafjarðarhreppur, Austurbyggð (which was Búðahreppur and Stöðvarhreppur the year before) and Fáskrúðsfjarðarhreppur municipalities.  The results reported in Figure 1 for Fjarðabyggð in   the years 2002 – 2005 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 2002 - 2003 are the sums of net municipal income tax in these three municipalities.

Changes of municipal income tax in selected municipalities in East Iceland

Figure 2: Net Municipal income (without Equalizing fund) tax in Seyðisfjörður, Fljótsdalshreppur, Breiðdalshreppur and Djúpavogshreppur municipalities in the years 2002-2016 in price level index for 2016.

Raw data in Excel

Updated: November 2017
Source: Samband íslenskra sveitarfélaga


b) Expenditure ratio

Figure 3 displays the income/expenditure ratio in A and B operation of selected municipalities in Mid East Iceland from 2002 - 2016. Value over 100% means that income is more than expenditure. Value under 100% means that income is less than the expenditure.

3.5-b-2017

Figure 3: Municipal A and B operation income/expenditure ratio in East Iceland 2002 - 2016.

Table in PDF   Raw data in Excel  

Updated: November 2017
Source: Samband íslenskra sveitarfélaga Retrieved October 20 2017 from http://www.samband.is/media/arsreikningar-sveitarfelaga/Net_Rekstrarreikningur.xlsx

c. Contribution

Local government gross income shows municipal income tax, minus operations (A segment).

Contribution margin as a ratio of income

Figure 4: Contribution margin as a ratio of income.

Raw data in Excel

Updated: November 2017

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


d. Liabilities in Municipals in East Iceland

Debts and obligations in A operation in selected municipalities in East Iceland from 2002 - 2016.

Ratio of liabilities/income part AFigure 5: Ratio of liabilities/income in selected Municipalities in East Iceland 2002 - 2016.


Liabilities

Figure 6: Liabilities in thousands of IKR in Fjarðabyggð and Fljótsdalshérað 2002 - 2016 in consumer price level index for 2016.

Liabilities

Figure 7: Liabilities in thousands of ISK in Seyðisfjörður, Fljótsdalshreppur, Breiðdashreppur and Djúpavogshreppur 2002 - 2016 in consumer price level index for 2016.

Raw data in Excel

Updated: December 2017
Source: Samband íslenskra sveitarfélaga Retrieved October 20 2017 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).
  3. Municipal income vs. expenditure (including financial items).
  4. Municipal debt level in East Iceland

Targets:

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


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

Baseline in current form of Municipalities

Source: Icelandic Association of Local Authorities http://wayback.vefsafn.is/wayback/20050629160831/http://www.samband.is/files/%7B700197D0-565E-49E4-BA73-5FF51E63DD02%7D_Bls_80-175.pdf