World Bank2012-03-192012-03-192011-02-01https://hdl.handle.net/10986/2736Sub-national Governments play an important role in the Romanian public sector. In 2009, sub-national spending was equivalent to 8.5 percent of gross domestic product (GDP). Romania has frequently adjusted its system for financing sub-national government over the last decade. These changes reflect ongoing Government concerns over the performance of local governments as well as attempts to increase the transparency and stability of the intergovernmental fiscal relationship. The most recent reform proposals reflect a more immediate concern: the government deficit. In an effort to meet aggregate targets for cuts in spending, the Government has been debating measures to reduce the local wage bill, cut transfers to local governments, and restrain local arrears. The principal objective of this technical assistance has been to advise the Government on the design and implementation of such efforts, and to suggest directions for longer-term structural reforms. Romania has a two-tier structure of local government. The national territory is divided into 41 counties (judets) and the city of Bucharest. These are then divided into various categories of second-tier local governments, hereafter referred to as localities. As of 2008, there were 3,179 such jurisdictions, consisting of 2,855 communes, 216 towns, 102 cities, and six Bucharest districts. Both counties and localities have elected councils and directly elected mayors/presidents. The budgets of sub-national governments are dominated by spending on education. Education accounted for 30 percent of sub-national expenditure in 2009. But the role of sub-national governments in education is limited. Localities act as paymasters for the ministry of education, distributing teachers' salaries on its behalf. These payments are financed from earmarked grants. Localities have no control over staffing numbers or wage levels in the education sector. They are, however, responsible for operating and maintaining school buildings, a function which they finance from discretionary revenues. In much the same respect, localities act as agents of centrally-financed social assistance programs, such as the guaranteed minimum income.CC BY 3.0 IGOACCOUNTANTACCOUNTINGADMINISTRATIVE BURDENADMINISTRATIVE CAPACITYARREARSBAILOUTBAILOUTSBANKING SECTORBANKRUPTCIESBANKRUPTCY LAWBANKRUPTCY PROCEDUREBLOCK GRANTBORROWERBUDGET CYCLEBUDGET EXECUTIONBUDGET PROCESSBUDGET REQUIREMENTCAPITAL EXPENDITURECAPITAL EXPENDITURESCAPITAL GRANTSCAPITAL INVESTMENTCAPITAL PROJECTSCAPITALSCASH FLOWCENTRAL AGENCIESCENTRAL GOVERNMENTCENTRAL GOVERNMENT AGENCIESCENTRAL GOVERNMENT CONTROLCENTRAL GOVERNMENT SUBSIDIESCITIESCIVIL SERVICECOST SHARINGCOST-SHARINGCREDIT APPLICANTCREDITORSCURRENCYCURRENT ACCOUNTDEBT CONTROLSDEBT FORGIVENESSDEBT MANAGEMENTDEBT REPAYMENTDEBT SERVICEDECENTRALIZATIONDEFICITSDEVELOPMENT EXPENDITURESDISBURSEMENTSDISCRETIONARY REVENUESDISTRICTDISTRICT HEATINGDISTRICTSELECTRICITYEQUALIZATIONEQUIPMENTEXPENDITURESFINANCIAL ASSETSFINANCIAL CRISISFINANCIAL DISTRESSFINANCIAL INSTITUTIONSFINANCIAL MANAGEMENTFINANCIAL SYSTEMFISCAL CAPACITYFISCAL CRISISFISCAL DISCIPLINEFISCAL GAPSFISCAL POLICYGARBAGE COLLECTIONGOVERNMENT BANKRUPTCYGOVERNMENT BUDGETGOVERNMENT BUDGETINGGOVERNMENT DEFICITGOVERNMENT FINANCEGOVERNMENT REGULATIONSGOVERNMENT REVENUEGOVERNMENT SUBSIDYHOUSEHOLDSINCOME TAXINSURANCEINTERGOVERNMENTAL FISCAL RELATIONSINTERGOVERNMENTAL FISCAL RELATIONSHIPINTERGOVERNMENTAL TRANSFERSINVENTORIESINVENTORYLAND PARCELSLARGER TOWNSLEGISLATIONLENDERSLEVYLICENSESLOANLOCAL AUTONOMYLOCAL COUNCILSLOCAL DEBTLOCAL EXPENDITURELOCAL FINANCELOCAL GOVERNMENTLOCAL GOVERNMENT BORROWERSLOCAL GOVERNMENT BORROWINGLOCAL GOVERNMENT FINANCELOCAL GOVERNMENT REVENUELOCAL GOVERNMENT REVENUESLOCAL GOVERNMENT SPENDINGLOCAL GOVERNMENTSLOCAL INFRASTRUCTURELOCAL PUBLIC ADMINISTRATIONLOCAL PUBLIC FINANCELOCAL REVENUELOCAL SPENDINGLOCAL TAXESLONG TERM DEBTMARKET VALUEMARKET VALUESMAYORMAYORSMINISTRY OF EDUCATIONMINISTRY OF FINANCEMUNICIPALMUNICIPAL BANKRUPTCYMUNICIPALITIESMUNICIPALITYNATIONAL BANKNURSERY SCHOOLOPERATING COSTSOUTSTANDING STOCKPENSIONPENSION FUNDSPERSONAL INCOMEPOLICY DISCRETIONPRINCIPAL REPAYMENTPRIVATE SECTORPRIVATE SECTOR LENDERSPROPERTY OWNERSHIPPROPERTY TAXPROPERTY TAX ADMINISTRATIONPROPERTY TAX REFORMPROPERTY TAXESPROVISIONSPUBLICPUBLIC DEBTPUBLIC FINANCEPUBLIC INVESTMENTSPUBLIC SECTORPUBLIC SECTOR DEFICITPUBLIC SERVICESPUBLIC TRANSPORTPUBLIC TRANSPORTATIONPUBLIC UTILITIESREAL ESTATERECEIPTSRECURRENT EXPENDITURERECURRENT EXPENDITURESREGISTRATION FEESREGULATORY AUTHORITIESREPAYMENT OF PRINCIPALREPAYMENT PERIODREVENUE MOBILIZATIONROADSSCHOOL BUILDINGSSECTORAL MINISTRIESSEWAGESTAMP DUTIESSTATE BUDGETSTREETSSTRUCTURAL REFORMSSUBNATIONALSUBNATIONAL EXPENDITURESUBNATIONAL GOVERNMENTSUBNATIONAL GOVERNMENTSSUBVENTIONSTARIFF REVENUESTAXTAX ADMINISTRATIONTAX BASETAX BASESTAX CODETAX OBLIGATIONSTAX RATETAX RATESTAX REFORMTAX REVENUESTAX SHARINGTAXPAYERSTECHNICAL ASSISTANCETOWNTOWNSTRANSPARENCYTREASURYUNIONURBAN AREASWAGESWorld Bank10.1596/2736