The article deals with the problem of adjusting the revenues of Polish local government units (LGUs) to their tasks. The problem was analysed both from the point of view of the possibility of increasing LGU revenues and designing an effective system of fiscal equalization. The authors discussed the external factors which limit the possibilities of introducing such a desirable system. Next, based on the presented analysis, they drew conclusions regarding the necessary revision of the existing scheme. The article concludes with specific recommendations for a new system of financing LGUs, assuming, in particular, far-reaching changes in the algorithms for determining and dividing general subsidies, as well as a fundamental reduction in the scope of the so-called commissioned tasks.
Federalism, Grants, and Fiscal Equalization