Open Access Article SciPap-1249
Impact of the COVID-19 Pandemic on the Budget of Slovak Local Governments: Much Cry and Little Wool?
by Tomáš Černěnko 1,* iD icon, Erika Neubauerová 2 iD icon and Alena Zubaľová 3 iD icon

1 Department of Public Administration and Regional Development, University of Economics in Bratislava, Faculty of National Economy, Dolnozemská cesta 1, Bratislava 852 35, Slovakia

2 Institute of Economic Sciences, Comenius University, Šafárikovo nám. 6, Bratislava 81000, Slovakia

3 Department of Finance, University of Economics in Bratislava, Faculty of National Economy, Dolnozemská cesta 1, Bratislava 85235, Slovakia

* Authors to whom correspondence should be addressed.

Abstract: The aim of the paper is to examine the impact of the COVID-19 pandemic on the budgets of Slovak local governments and to propose measures that would help them better cope with similar shocks in the future (in the economic context). In the first step, we compare tax revenues with their forecast values from 2019. Subsequently, we focus on the dependence of local government revenues on share taxes - personal income tax, which we examine using the Herfindahl-Hirschman Index at the level of individual local governments. We then examine this in the context of size categories of local governments as well as physical space - regions and districts. The results suggest that the COVID-19 impact on local government revenues was much less than expected. However, it revealed the economic limits of the system (structure) of local self-government in Slovakia with a majority of small (and vulnerable) local governments. The way out would be a shift to property taxes, but this is limited due the reluctance of local government representatives to accept a greater degree of responsibility for filling the revenue side of budgets with local taxes and fees.

Keywords: Local Government, Covid-19, Local Taxes And Fees, Tax Income Concentration, Shared Taxes, Herfindahl-Hirschman Index

JEL classification:   H24 - Personal Income and Other Nonbusiness Taxes and Subsidies,   H30 - General,   H71 - State and Local Taxation, Subsidies, and Revenue

SciPap 2021, 29(1), 1249;

Received: 9 February 2021 / Revised: 25 March 2021 / Accepted: 25 March 2021 / Published: 5 May 2021