CITB04H3 Lecture Notes - Lecture 9: About The Money, Credit Rating Agency, Deficit Spending
Document Summary
From provincial to municipal (in canadian cities). "download" - responsibility for funding local services is handed down from senior levels of government to local government: results in local governments to deliver and fund an increasing number of services. Fiscal decentralization may include the transfer of necessary funds to finance the new expenditures but may also mean creating an "unfunded mandate" - example: social housing. "every year, council uses reserve funds, loans, grants from the province, investment income and other money that may or may not show up the following year. Formula: estimated residential property tax = assessed value of property x residential tax rate: advantages, predictability, difficult to evade, highly transparent (lump sum payments), tax base increases with city growth. Inter-municipal agreements: restrictive or adaptive, restrictive: set out clear processes, authority and outcome requirements; used for large budget items (water/sewer/rec centres and social services), adaptive: provide broad discretion and flexibility to adjust agreements; used for complementary services.