Decentralisation of the Functions of the Public Sector from the State Level to Local and Regional Self-Government Units and Fiscal Decentralisation

Decentralizacija funkcija javnog sekora u području osnovnog i srednjeg školstva, zdravstva i socijalne skrbi s državne razine na jedinice lokalne i područne (regionalne) samouprave zahtijeva i prenošenje odgovarajućih financijskih sredstava. U radu se prikazuju oblici fiskalne decentralizacije i financijske pomoći jedinicama lokalne i područne (regionalne) samouprave za pokriće troškova javnog sektora koji su decentralizirani od 1. srpnja 2001.The process o f decentralization of the public sector in Croatia began on the 1st of July 2001. In the first phase o f decentralization, laws have been adopted by which some activities in the field of primary and secondary education, health and social welfare are delegated from the central level to local and regional self-government units. By delegating these activities to local and regional self-government units, the function of their financing is delegated to them as well. For this purpose, a part of revenue from income tax (which belongs to the budget of the Republic of Croatia) is transferred to local and regional self-government units and the System of support from the state budget to those local and regional self-government units which are unable to finance delegated activities alone has been established. The author States that in the course of decentralization there have been some deficiencies caused by: the absence o f the strategy of decentralization, speed of its implementation, lack of preparation for the implementation of laws, insufficient co-operation between the central government and the bodies o f local and regional self-government units, inadequate actual decentralization of financial resources, inefficiency of local civil servants and infrastructure in local and regional self-government units, limited possibilities of deciding on the redistribution of financial resources, bureaucratic control of the central administration and the low level of minimal standards for delegated activities. In the author’s opinion, in the second phase it will be necessary to consider the proposals for transformation of joint taxes into exclusive taxes of local and regional self-government as well as to organize services in local and regional self-government units which will be capable of taking over the tasks of financing public services delegated to them