Financial Problems of Municipalities in Turkey and Possible Effects

The municipalities have become the focal point of some positive developments on economic growth and development through more efficient use of resources. In addition, they have come to the fore in terms of democracy, accountability, fiscal discipline and fiscal responsibility with the advantages they provide for participation. The development of welfare state understanding with these factors, population growth, urbanization process and localization, widespread in the post-1980 period, decentralization, governance and locality in service, put municipalities in the foreground in the process of public service supply. Moreover, there has been an increasing share of duties between central governments and municipalities. Public service burden on municipalities increased in quality and quantity. As a result of the increased service burden, the spending levels of municipalities have also increased. However, the positive developments in the allocation of duties have not been experienced in especially own-revenues allocation and have generally been insufficient compared to the revenues, duties and responsibilities of municipalities. Turkish municipalities, which do not have the authority to tax, create new sources of income, cannot use the available resources effectively and overly dependent on the shares transferred from the general budget tax revenues collection are moving away from being efficient service units and are deprived of the possible benefits that may be obtained by financial autonomy. The context of aforementioned, in this study, the main financial problems of municipalities and possible effects of these problems are examined. It was concluded that the mentioned problems should be solved urgently, to reach municipalities more effective and efficient, increase citizens' satisfaction