Compensatory Mechanisms in Local Finance Reform
In March 2022, the Institute for Market Economics released a film called ”2% in your municipality”, which presents the concept of financial decentralization and investing a fifth of income tax revenues in local economies. A key theme in the film is interregional inequalities and opportunities for compensating those in the proposed new model. Given that the Parliament has finally managed to pass the budget for 2022, one can focus once again on finding long-term solutions to issues in local finances. The big concern regarding financial decentralization, which needs addressing, is the problem of regional disparities.