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Pawel Swianiewicz
standard required in the European Union, local governments’ progress over the past decade has been tremendous. During the first term of democratic local governments (1990–94) alone, the length of the water provision network increased by 58 percent, and the capacity of communal sewage treatment plants increased by 73 percent. Between 1990 and 1999, the number of rural households connected to a water, sewage, or gas network increased about threefold. Recent experiences with EU preaccession funds shows that the majority of local governments have been able to learn and implement complicated procedures required to take advantage of the opportunities that are arising. These simple data illustrate that most local governments are able to cope with management of the services that they are responsible for.
Local Governments’ Own Taxes and Charges Local governments in Poland are financed through a mixture of (a) local taxes and other own-source revenues, (b) local shares in central taxes, and (c) central general-purpose and specific grants. In this section, we concentrate on the first category of revenues. The municipal government is the only tier of local government that has a limited power of taxation. Both county and regional governments are financed mostly by central general and specific grants, with a considerable contribution of shares in central taxes and a few very minor own-source revenues. One may even question whether this system of county and regional finance complies with the requirements of the constitution, which in article 168 states that “territorial self-government units have a right to set rates of local fees and taxes, within limits decided in the law.” We return to this issue in the last section of the chapter. The following local taxes are revenues of the municipal tier: property tax, tax on agriculture, tax on vehicles, forest tax, tax on dog owners, tax on civil legal activities, tax on legacies and donations, and tax on small businesses. With the exception of the last three (which are collected by the state tax administration), local taxes are administered and collected by the municipal administration. The general rule is that the maximum rates of local taxes are decided in the central legislation, although local governments may set their own rates that are equal to or lower than the ceiling level. Local governments can also use other instruments of their own tax policies; these instruments are discussed later.
