Report: The future for Polish local governments looks dim

An annual ranking shows a wealth of crises threatening local financial stability

On 30 July, ‘Wspólnota’, a newspaper reporting on Polish municipal issues, published its annual ranking of the wealthiest local governments in the country. The ranking covers a snapshot of 2021 outlining some of the key features of local economies.

Apart from per capita wealth, the ranking, which was first done by Prof Paweł Swianiewicz and Dr Julita Łukomska from the University of Warsaw over 20 years ago, also delves into regional financial stability as well as future challenges for local authorities.

As opposed to the usually optimistic outlook on the future development of Poland, researchers point to a wealth of crises that make the future of local governments quite dim, when compared to previous years.

The current and future challenges for Polish local governments

The last time TheMayor.EU covered the Polish Cities Wealth Ranking was in 2019 after Poland was officially declared as a ‘developed country’. Back then, the ranking listed the continued flow of capital and efficient social policy as benefits with a generally positive outlook for future development.

The 2021 ranking, however, has a much more pessimistic view of the future of local governments. According to a press statement by the association, the government's narrative about the excellent results of local government budgets is misleading and the future looks grim.

The study cites a sustained long-term inflation problem, as well as tax changes that cut local authorities’ budgets, as the great future challenges. Additionally, the growing uncertainty over the absorption of EU funds, as well as the financial tensions generated by the war in Ukraine and the wave of refugees, are all big threats to regional development.

One quote from the study itself reads: “All this means that the near and distant future of local government budgets must be viewed with a great deal of anxiety.”

The ranking

One thing the authors emphasize is that the results of the study still show stability in the local governments. In terms of wealth per capita in regional (voivodship) capitals, Warsaw (8934,73 zloty) unsurprisingly tops the list, followed by Wroclaw (7383,80 zloty), Opole (7134,54 zloty), Krakow (7003,56 zloty) and Poznan (6838,94 zloty).

The second section deals with powiat cities, which have the status of counties or districts. The list is topped by Sopot with the highest per capita wealth at 9253,36 zloty, followed by Płock (7248,73 zloty), Gliwice (6826,40 zloty), Dąbrowa Górnicza (6765,01 zloty) and Świnoujście (6489,06 zloty).

The authors point out that many of the results in this year’s ranking are the result of external transfers and foreign investment rather than locally collected tax revenues.