NALAS, the USAID-funded Planning and Local Governance Project (PLGP) and the Association of Municipalities of Albania will collaborate to organize a peer learning workshop on “Best Practices in Local Government Finance Legislation: the SEE Experience and the Challenges Facing Albania“, to take place in Tirana, on 9-10 February 2016.

At this workshop, municipal finance experts from NALAS members will discuss with their Albanian peers the strengths and weaknesses of the local government finance laws in South-East Europe (SEE). The workshop will provide Albanian national and local government officials with in-depth comparative knowledge about how key municipal finance issues are regulated in other countries, as well as with information about what solutions seems to have worked best. It will help the Ministries of Finance and Local Government begin drafting Albania’s new legislation by providing them with detailed, comparative information about the structure and content of local government finance laws.

In 2015 Albania consolidated its local governments reducing their number from 373 to 61. Consolidation is part of a broader decentralization strategy and will be accompanied by the devolution of new functions to local governments and the reform of intergovernmental relations and municipal finance. Important first steps in this direction have already been made. A new Local Government Organic Law was approved by Parliament. In 2016 the government is expecting to draft and pass a new Law on Local Government Finance.

These issues to be discussed at this workshop include:

  • How to define the own-revenue raising powers of local governments?
  • Which taxes should be shared with local governments and how?
  • How responsibility for the various dimensions of property taxation should be divided between levels of government (registration, valuation, billing, rate setting, and collection?
  • How grant pools and grant formulas for conditional and unconditional grants should be specified in the legal regime, including provisions for fiscal equalization?
  • How the right of local governments to incur debt should be defined?
  • How the financial reporting and accounting responsibilities of local governments should be regulated so as to encourage their improvement?
  • What obligations should fall to the national government with respect to providing local governments about their grants and transfers?
  • What should be the respective powers of the legislature and the executive in forming, amending and implementing local budgets?
  • How can the law best ensure a continuous, meaningful dialogue between the national government and local governments?