Region’s Unconditional transfers from the State budget

A part of unconditional transfer given from the State Budget to local government is administered by regions.  Round 98-99% of these funds, are used to finance the most important functions of regions, while the other part is used for supporting special situations. The amount allocated to each region is determined by a specific formula, which has four elements and each of them has a certain weight. The first element is a fixed amount which is equal for all regions.

While three other elements: population, geographic indicator and road coefficient are the variables that bring out differences between funds given for each region. From time to time, the importance of each variable, determining the funds allocated of each region changes; especially the variables of the fixed amount and population.
 


^{Source: Ministry of Finance
Analysis and Comments: Open Data Albania
Data taken from the ANNEX no.1 of the Annual Budget of respective year}

^{Source: Ministry of Finance
Analysis and Comments: Open Data Albania}

Thus, in 2004, fixed amount variable determines 25% of UT (unconditional transfer) for the region, while the population variable determines the distribution of 15% of the total transfer. In 2005, these variables changed their importance, giving more importance to population than the fixed amount. However, this latter would discriminate the regions with small number of population, and for this reason since 2007 the importance of population variable has not exceed the level of 28%. Geographical indicator has been stable at the level of 30%. It takes into account the advantages and disadvantages of geographical position and aims to favor regions with the most difficult geographical positions . While the fourth variable, since 2007 has the highest weight, making the road lengths one of the main determinant factor for the UT of each region.

The chart below gives a clearer picture of unconditional transfer to each region during 2003-2012.
 


Source: Ministry of Finance
Analysis and Comments: Open Data Albania

^{Data for years 2003-2006; 2009; 2012 is taken from the Initial Budget.
Data for the year 2007 is calculated as sum for UP in the Initial Budget + UP in the revised Budget (due to the effects of the flat rate tax)}

Data for year 2008 is taken from the Revised Budget (Supplementary one)
Data for years 2010-2011 is  taken from the Revised Budget

Regions with the highest UT for each year have been Elbasan following by the region of Dibra. These two regions appear to have relatively significant difference in the amount of the UT compared with other regions, which fluctuate more or less at the same levels. Compared with the third more financed region which is Shkodra, the region of Dibra is financed round 18% more, while comparing to the region of Elbasan this difference is at the level of 39%.  After them come the Region of Korca, followed by Lezha, Gjirokastra and Fier.  In the last four places are listed the regions of Berat, Vlora, Tirana and Durres.

All the information is shown in the dynamic table below:

^{Source: Ministry of Finance
Analysis and Comments: Open Data Albania}

Data for years 2003-2006; 2009; 2012 is taken from the Initial Budget.
Data for the year 2007 is calculated as sum for UP in the Initial Budget + UP in the revised Budget (due to the effects of the flat rate tax)

Data for year 2008 is taken from the Revised Budget (Supplementary one)
Data for years 2010-2011 is  taken from the Revised Budget

The country is divided into three areas: fields, hills, mountains which have the variables of 1-3-5 respectively. The larger this variable, the higher the amount of the UP that the region  benefit due to its geographical position