Sustainable Municipalism within the Framework of United Nations Sustainable Development Goals

In General

With the process of globalization, competitive conditions are constantly changing, and adapting to the shifting conjuncture has become inevitable for sustainable development. In this context, the realization of local development depends primarily on local actors taking initiative in economic, cultural, and social spheres to formulate policies for sustainable development. 

The economic conditions our country is currently facing, fiscal limitations on public expenditures, the need to raise public service standards in line with citizen demands and expectations, and technological developments make it necessary to restructure the delivery and costs of municipal services. Driven by this need, one of the key objectives of the fiscal efforts undertaken by local governments is to establish a sustainable municipal administration with a strong institutional structure that utilizes all human, physical, and financial public resources economically, efficiently, and effectively.

In order to address the issue of scale and ensure service integrity in our country, recent reforms and regulations have reduced the number of town municipalities while expanding the scope of metropolitan municipalities and increasing their duties and powers. On the other hand, provincial special administrations have been abolished in metropolitan areas, the boundaries of metropolitan municipalities have been extended to provincial borders, and their number has been increased to 30. While 94% of our population lives within municipal boundaries, the proportion of the population receiving public services from metropolitan municipalities has steadily increased to 78%, meaning that in our country, the term 'local government' now brings to mind municipalities, and 'municipality' brings to mind metropolitan municipalities. 

Therefore, among the most important goals of sustainable municipalism, which must be carried out comprehensively in local governments, should be the establishment of a culture of fiscal discipline in a transparent and accountable manner, the improvement of the quality of municipal services through the economic, efficient, and effective use of existing resources, and the prioritization of improving the living conditions of our citizens and increasing the quality of life and prosperity in our cities by creating more livable urban environments. However, the injustice in the distribution of tax shares from the central government negatively affects the ability of metropolitan municipalities, which have the same duties, powers, and responsibilities, to produce services under equal conditions and impacts the competitive power of cities. There is no objective or justifiable reason for why some municipalities receive low shares while others receive high ones.

Policies implemented without considering the concept of sustainable municipalism—which aims to meet the needs of current generations without compromising the ability of future generations to meet their own needs, by establishing a balance between economic, social, and environmental dimensions—have only created palliative solutions. 

The global financial crisis, fluctuations in the supply and prices of commodities, especially food, pandemics, the refugee crisis, the Russia-Ukraine war, crises and uncertainties in the Middle East, and the risks posed by environmental pollution and climate change continue to create negative impacts on the global economy. 

This situation at the global level also cyclically affects the Turkish economy, which is integrated into the global economy through channels of investment, trade, finance, tourism, and expectations, and consequently, the fiscal situation of our municipalities, 80% of whose revenues depend on general budget tax revenues from the central government. 

On one hand, the contraction of external resources, and on the other, the rising exchange rates, inflation levels, and the unpredictability of subsequent macroeconomic indicators resulting from incorrect, inconsistent, and non-transparent economic policies, along with political and economic instabilities, have caused very high increases in the costs of traditional municipal services. 

Furthermore, problems brought about by pandemics, natural disasters, and economic crises have created new cost items for local governments, primarily in social transfer expenditures. Therefore, one of the important goals of the financial work carried out by local governments should be to establish a sustainable municipal administration with a strong institutional structure that uses all kinds of human, physical, and financial public resources economically, efficiently, and effectively.

WHAT IS SUSTAINABLE MUNICIPALISM?

-It is a municipal approach that uses its resources economically, efficiently, and effectively in conjunction with other funds to be provided, and distributes them in a balanced and fair manner between the east-west, south-north, and center-rural areas of the city, 

-Ensures fiscal discipline, is predictable, and makes its strong structure and activities sustainable by increasing its institutional capacity, 

-Prioritizes its investments and expenditures in line with the needs of the city, 

-It is a multidimensional and comprehensive understanding of municipalism that aims to meet the needs of today's generation of citizens without compromising the ability of future generations to meet their own needs, by establishing a balance between economic, social, and environmental dimensions.

The concept of sustainable municipalism will focus on creating a safe city with more hopeful and happy citizens, where quality of life and prosperity are high, in an environment of freedom, justice, equality, and solidarity, without giving up on our present or our children's future. The concept of sustainable municipalism must also take into account the sustainability of managerial and institutional capacity in municipalities, alongside fiscal discipline.

We must prepare for the centuries-spanning future of our country starting now. The proverb, "The world was not inherited from our grandfathers, we borrowed it from our children," should form the foundation of our sustainable municipalism approach. Within the framework of our sustainable municipalism, we must use our resources economically, efficiently, and effectively, alongside other funds to be provided. In this context, measures must first be taken to make the financial structure of municipalities more sustainable, which has deteriorated due to recent increases in investment expenditures, income-expenditure imbalances, the ineffective distribution of revenues to expenditures, and unplanned services. 

FISCAL DISCIPLINE AND FISCAL SUSTAINABILITY IN MUNICIPALITIES...

For our municipalities to have sustainable financial performance, the following should be targeted: strengthening the financial infrastructure, basing activities more on own-source revenues, making the income/expenditure balance healthier, effectively managing the stock of treasury-guaranteed external debt and overdue debt amounts to ensure they do not exceed debt limits, reducing the share of personnel expenses within total expenditures to legal limits, and diversifying resources at local, national, and international levels,  ensuring a healthier balance sheet and cash flow by strengthening the financial structure, reducing the cost of debt, extending maturities, and minimizing foreign currency-denominated debt... measures to increase financial performance should be targeted.

In this framework, increasing the own-source revenues of local governments through expenditure-reducing and revenue-increasing activities and revenue-generating efforts (including the transfer of certain local revenues to local administrations and the sharing of some revenues between central and local government units), and ensuring budget discipline and increased efficiency,  has become even more important: conducting benefit-cost analysis for every expenditure item within the framework of budget constraints to perform strategic prioritization, increasing institutional capacity, and ensuring that fiscal discipline becomes sustainable through good governance and the effective, economical, and efficient use of human, physical, and financial resources, thereby embedding the concept of sustainable municipalism in local governments. 

Therefore,  in addition to the type, size, and distribution of expenditures made by municipalities using limited resources, these resources must be used economically, efficiently, and effectively within the framework of the priorities of cities and their citizens, alongside other funds allocated for this purpose (private, NGO, local, national, international, etc.). Beyond their own resources, municipalities should be provided with more funding (grants, loans, credits, guarantees, co-financing methods, projects, and programs) through projects and programs financed partially or entirely by regional or international organizations such as the World Bank, EBRD, and other IFIs, in addition to EU funds. By diversifying funding sources with alternative options under more favorable conditions (low-cost and long-term),  and by ensuring that these funds are used more economically, efficiently, and effectively, higher added value should be created through a SOCIAL, SUSTAINABLE, AND PROJECT-ORIENTED MUNICIPALISM approach.

FAIR DISTRIBUTION OF TAX SHARES FROM THE CENTRAL GOVERNMENT AND RELATED REGULATIONS

Metropolitan municipalities, which aim to establish a sustainable municipal administration and have become directly influential in the quality of life for more than three-quarters of the country's population, have a financial structure highly dependent on tax shares received from the central government. However, the injustice in the distribution of these tax shares negatively affects the ability of metropolitan municipalities with the same duties, powers, and responsibilities to produce services under equal conditions and impacts the competitiveness of cities. There is no objective or justifiable reason for why some municipalities receive low shares while others receive high ones. Therefore, in order to ensure a fairer distribution of tax shares from the central government to local administrations, especially metropolitan municipalities, the necessary amendments must be made to the relevant legislation, primarily Law No. 5779 on the Allocation of Shares from General Budget Tax Revenues to Special Provincial Administrations and Municipalities, as listed below.  

-Reorganization of Share Distribution

-Provision of Equalization Grants

     *For those falling below the average in tax shares received from the central government

      *For those whose income falls below the potential income caused by disasters

-Payment of customs duties in the provinces where the taxable event occurs

-Sustainable Municipalism Index and performance-based budget allocation

-Establishment of a Municipal Conciliation Commission

-Reduction of deduction rates applied to municipal financial shares

-Reducing uncertainties regarding monthly revenue estimates and ensuring the uninterrupted period is more & predictable and longer-lasting

UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS AND SUSTAINABLE MUNICIPALITY INDEX

Based on the United Nations' 2030 'Sustainable Development Goals (SDGs)', which consist of 17 Goals, 169 Targets, and 244 Indicators, a Sustainable Municipality Index (SMI) should be created. This index would treat the local achievement of these goals and targets in municipal activities and services as a performance criterion, allowing for the measurement, evaluation, and monitoring of progress at the local level. Municipalities that succeed in these indicators or related targets should be allocated a performance-based success grant. In the distribution of tax shares from the central government, beyond criteria such as population and surface area (while also considering other relevant factors like seasonal population, tourism and industrial status, and land structure), the results of the SMI, which measures and evaluates municipal performance, could also be used as a performance criterion. Municipalities with high index values and strong performance could receive a higher success bonus from the budget. These success bonuses could then be used to finance local projects related to sustainable development goals.

In Conclusion;

We have a responsibility to protect and develop resources and to hand them over intact to future generations. Every budget reflects a choice. Both in the annual budgets and strategic plans of our municipalities, the aim should be to improve the socio-economic indicators of our cities, raise the level of development, and contribute to the economic growth of both our cities and our country by ending poverty and hunger, ensuring healthy individuals, quality education, gender equality, clean water and sanitation, accessible and clean energy, and creating decent work.

Without ignoring the fact that we are building tomorrow with today's budget, we must serve our citizens with a sustainable municipalism approach that ensures their well-being in ecological, economic, and social terms, providing a life worthy of their dignity through a socially inclusive municipal philosophy.