Finanse jednostek samorządu terytorialnego w Polsce w pierwszym roku pandemii

Purpose – The aim of the article is to assess the impact of the COVID-19 pandemic on local government finances in Poland in 2020 – both in terms of income, as well as expenditure and debt. The availability of a complete database on local government finances enables the verification of previous predictions of the loss of own income and of a significant deterioration of the local government units' (LGUs) financial situation. Research method – The analysis of the legislation affecting the finances of LGUs was carried out, as well as a statistical analysis covering all LGUs in Poland. For comparative purposes, financial data from before 2020 was also used. The study also covers the analysis of the method of distributing funds from the Governmental Fund for Local Investments in 2020. Results – Despite the planned deficit, local government units ended the first pandemic year with a budget surplus of PLN 5.7 billion, which was mainly influenced by the financial support from the central sector and by the capital expenditures decline. Nevertheless, government support was most often directed not to those units that were most severely affected by the pandemic. Originality /value / implications /recommendations – Unfavorable trends in local finances indicate an urgent need for changes in the relations between the government and local government sectors, restoring the compliance of the LGU financing system with the political position of the local government. These changes should, in particular, limit the discretion in determining the amount of transfers from the government sector, as well as adjust the size of the LGUs’ revenues to the changes in the tax system. Restrictions on shaping the structure of local government expenditure should also be lifted.