56
Chris Heymans
been working with municipalities to achieve fully integrated budgets, rather than merely aggregating the different budgets from the previous municipalities that were amalgamated. There has been considerable progress toward such integration, although the institutional legacy and capacity shortcomings have made it a complex task. The outstanding demarcation issues—especially the undoing of cross-border municipalities—have also had to be dealt with. Table 2.1 provides a brief overview of main local government budget trends. Municipal expenditure budgets have grown from R 54.9 billion in 1999/2000 to R 101.2 billion in 2004/05, and they are estimated to touch on R 120 billion in 2005/06.6 Notable annual increases in budgeted income have occurred in several years, and budgeted figures for the increase from 2003/04 to 2004/05 were as high as 36.8 percent. There have been some encouraging trends on the local revenue side: budgeted income from property rates has consistently grown at over 8 percent since 2001/02. Although observers have expressed caution about the potentially dampening effects of such increases on local economic growth, the increases do indicate a positive trend in local revenue
T A B L E 2 . 1 Municipal Budget Trends, FY 2002/03–FY 2005/06 (R billion) Budgeted expenditure
2002/03
2003/04
Operating budget Salaries Bulk services (water and electricity) Other (repairs, maintenance, provision for uncollected revenue, loans)
52.7 22.9 17.1
72.6 25.5 19.1
84.1 17.9 13.7
93.3 27.6 20.5
29.8
36.1
21.1
38.9
Capital budget
11.7
16.7
17.1
25.9
Total budgeted expenditure Budgeted operating income Property rates Service charges (mainly water and electricity) RSC levies Intergovernmental grants Others
64.4 54.3 11.5
89.3 61.6 12.5
101.2 84.3 15.7
119.9 92.0 17.0
25.0 3.9 3.6 10.3
28.0 4.4 6.7 10.0
38.9 5.7 12.1 11.9
41.5 6.5 13.2 13.7
54.3
61.6
84.3
92.0
Total operating income
2004/05
2005/06
Source: National Treasury 2003b, 2004b; National Treasury database. Note: Totals may not add to 100 because of rounding, and the figures are based on estimates. The unusual increase in the revenue figures is yet to be revised, and it was not possible to ascertain at the time of writing what this increase could be attributed to.
