Giorgio Panella, Andrea Zatti, Fiorenza Carraro

“Historically the growth of cities has been driven by demographic pressure. Today is due to other driving forces such as the means of transportation, the price of land, individual housing preferences, demographic trends, cultural traditions and constraints, the attractiveness of exiting urban areas, and, not least, the application of land use planning policies at both local and regional scales” (EEA, 2006) FISCAL CRISIS OF LOCAL MUNICIPALITIES

 Predominance of budget needs over urban sustainability  Fiscal competition  Urban sprawl  Unsuccessfull assessment of the non monetary values of soils  Unequal rent distribution Fiscal authonomy-negative outcomes

Zoning and urban planning Development rights and fiscal instruments

 Law n10/1977 (legge Bucalossi)-Planning permission and planning contribution/construction charge Urbanization charges Construction costs Fiscal Objectives: - Compensations -Revenue collection -Revenue collection

Piemonte3,83,93,64,14,34,8 Valle d'Aosta 1,82,31,72,73,13,1 Lombardia4,14,45,25,73,54,6 Trentino Alto Adige 3,23,22,53,22,43,4 Veneto55,95,96,65,35,1 Friuli Venezia Giulia 1,82,42,22,21,51,6 Liguria1,92,22,83,23,73 Emilia Romagna 7,28,15,28,17,77,7 Toscana4,86,678,36,97,5 Umbria2,32,72,82,83,12,8 Marche3,55,54,46,56,35,5 Lazio34,34,496,55,3 Abruzzo4,14,44,24,94,35,3 Molise2,43,22,82,82,52,3 Campania1,51,82,23,53,72,6 Puglia4,14,15,55,35,73,9 Basilicata2,603,222,72,2 Calabria1,82,12,333,33 Sicilia3,11,72,43,832,5 Sardegna2,22,92,93,12,12,1 ITALIA3,74,14,35,54,44,4 Source: IRPET on ISTAT and ISAE data.

Average value Piemonte1212,911,11110,712,2 11,7 Valle d'Aosta 3,65,23,55,97,37,65,5 Lombardia7,37,89,810,25,67,98,1 Trentino Alto Adige 6,35,856,44,97,86,0 Veneto15,816,517,31714,313,715,8 Friuli Venezia Giulia 5,37,35,45,63,23,75,1 Liguria5,17,78,19,71311,29,1 Emilia Romagna 30,129,618,122,823,723,224,6 Toscana16,625,72325,424,324,423,2 Umbria5,15,95,35,25,95,75,5 Marche ,51715,314,1 Lazio15,319,917,734,52216,621,0 Abruzzo14,61714,711,310,414,513,8 Molise6129,47,77,568,1 Campania5,15,5710,311,98,28,0 Puglia17,113,219,214,222,314,816,8 Basilicata8,108,55,26,85,85,7 Calabria5,36,27,610,311,811,78,8 Sicilia11,97, ,512,713,4 Sardegna8,29,88,77,75,157,4 ITALIA10,111,311,813,810,911,3 11,5 Source: IRPET elaborations on ISAE data

Incidence established by the city council, on the basis of specific parameters provided by each Region according to:  The extent and trend of the population  The geographic characteristics  The zoned areas as defined by the town and urban planning  The limits and mandatory terms set by the central State and the Regions

The concept of use:  New residential buildings  Retrofitting of existing buildings  Retrofitting of buildings not belonging to the residential sector Estimate of the average cost of urbanization /construction Urbanization coefficients

 The predominance of budget needs with respect to urban sustainability problems  Fiscal competition between local municipalities  Municipal debt

 Correlation between urban planning and budget revenues  ICI & construction charges: objctive: catching part of the building rent functioning: building cadastrial rent vs. construction costs timetable: Once a years vs one off-payment Negative outcomes: 1) Predominance of budget needs On the one side, urban development enlarges the tax base for ICI and Urbanization charges; on the other one, it feeds the demand for urban infrastructures and services FLEXIBILITY

Negative outcomes: 2) Fiscal competition  Competition between neighboring local municipalities  Competition within the same metropolitan area  COOPERATIVE GAME  Tax base sharing  Institution of a compensation fund

Negative outcomes: 1) municipal debt  Urbanisation brings about an increase in the tax pressure -direct duties -tariffs  Increasing the tax rates of existing taxes  Relying on entrance taxes

Urbanized soil 2000 (km 2 ) Urbanized soil 1990 (km 2 ) Urbanized soil- Difference Rate of increase ( ) Torino452,58412,5740,018,8% Aosta47,0637,469,6020,4% Milano704,39694,1710,221,5% Brescia364,60350,4414,163,9% Bolzano116,93111,815,124,4% Venezia229,93217,6812,255,3% Trieste43,1941,601,593,7% Genova108,46108,460,000,0% Bologna206,70178,6128,0913,6% Firenze181,96166,1215,848,7% Perugia203,02189,8313,196,5% Ancona131,81130,401,411,1% Roma648,51624,8623,653,6% Napoli334,58326,777,812,3% Bari251,01249,621,390,6% Taranto144,87142,092,781,9% Reggio Calabria 107,1197,689,438,8% Palermo246,98240,526,462,6% Catania240,28236,673,611,5% Cagliari185,28160,9624,3213,1% ISPRA (2008) on CORINE Land Cover data. Urbanized soils (km 2 ) period

 Modulation of existing urban charges, according to the soil use and loss  Tax relieves for activities which do not involve an icrease in the urban load  ICI tax cut (and exemption) for high quality agricultural lands and landscapes  Construction charges able to tackle the soil loss and the negative externalities faced by the current and future generations  ICI, local Council property tax, defined in accordance with the land loss

Link between urban planning and local budget revenues Link between urban planning and local budget revenues New market based instruments serving environmental issues should be combined with existing traditional fiscal instruments (like exemptions or tax rebates) at local level Repeal of the construction charges or at least of the urbanization charges and arrangement of a new Local Council Property Tax Repeal of the construction charges or at least of the urbanization charges and arrangement of a new Local Council Property Tax Constrcution charges as environmental incentives/disincentives Constrcution charges as environmental incentives/disincentives Construction charges to reflect the costs involved in the provision of public goods (city centre vs. suburbs) Construction charges to reflect the costs involved in the provision of public goods (city centre vs. suburbs) Pigouvian tax Pigouvian tax Construction charges so as to account for the present and future costs. Construction charges so as to account for the present and future costs.