Budget deficit in municipalities: Propose a method for calculation and control based on the concept of resource sustainability(Case study: metropolises of Tehran, Mashhad, Shiraz and Rash)

Document Type : Original Article

Authors

1 PhD in Economic development and planning, Faculty of Economics, Allameh Tabatabai University of Tehran, Tehran, Iran

2 Master of Economic Development and Planning, Faculty of Economics, Allameh Tabatabai University, Tehran, Iran

3 Assistant Professor, Faculty of Economics, Allameh Tabatabai University, Tehran, Iran

Abstract

Budget deficit is one of the important concepts in budget preparation. failure to calculate budget deficit will lead to financial instability. Financing through volatile revenues such as borrowing or transferring capital assets is an example of a budget deficit in the municipality. The study uses the concepts of operational balance, general balance and unstable resources to calculate the budget deficit of the municipalities of Tehran, Mashhad, Shiraz and Qom during years 1390-1397. The results show:- recently, Tehran Municipality has faced an operating balance deficit and has provided part of current expenditures from the transfer of financial assets and capital.- In other metropolises, the general balance sheet and the general balance sheet without the transfer of unsustainable revenues indicate the use of unsustainable resources for budgetary purposes, which in long run, with the reduction of the city's biological reserves, the financial situation of these metropolises faces serious risks. To address the budget deficit, municipalities should be planted by defining new rows, increasing the base and toll rates of the current stable revenue tier, especially renovation tolls and value-added taxes and establishing a cost-benefit system. also possible control the budget deficit of municipalities by controlling the financing of unstable revenues for covering the budget deficit.- Determining ceiling of financing through borrowing by the Ministry of Interior in the annual budget of municipalities to prevent financial bankruptcy.- Determining ceiling for the general level without assigning unstable capital assets and obliging the municipality to observe for controling the sale of the city's biological capacities.

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References

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Urban Economics and Planning
Volume 3, Issue 1
May 2022
Pages 64-75

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History

  • Receive Date: 28 November 2021
  • Revise Date: 08 February 2022
  • Accept Date: 16 April 2022
  • First Publish Date: 16 April 2022

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