Own revenue potential of small towns in Poland

Abstract

Purpose – Assessing the level of and differences in own revenue potential of small cities having the status of urban municipalities. The study intended to answer the following research question: do the cities having the status of urban municipalities lag far behind greater towns in terms of own revenue potential, and has the gap between them grown over the years? – Is there a wide diversity in the level of own revenue potential of small towns depending on their level of development and functions? – What are the most important internal determinants affecting the level of own revenue potential of small towns with urban municipality status? Research method – The empirical research was conducted based on secondary data from the Local Data Bank of Statistics Poland, processed using basic descriptive statistics and taxonomic methods. The focus of the study was on small towns (with less than 20 thousand inhabitants) with urban municipality status (116 entities in 2020). The time span of the study was 2007–2020. Results – The potential for own revenue of cities having the status of urban municipalities varies strongly between them, but is on average only slightly smaller than that of other urban municipalities. Also, the fact that it is growing should be viewed as a positive development. While its level is impacted by internal conditions, external ones were the reason why in 2020 it stopped growing as fast as in the previous years. Originality / value / implications / recommendations – Monitoring the level of small cities’ own revenue potential due to their importance (77% of all cities, “rural growth poles”, “local development centres”) is aimed, among other things, at identifying financially disadvantaged units that may require state intervention in accordance with the implementation of the subsidiarity principle.