commission on fiscal imbalance 合集

In fact it was passed unanimously according to the

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Constitutional Court that, in 1999, essentially ruled in their favour. Since such a reform of the equalization system must be passed by the two houses of the federal Parliament, including the Bundesrat, it must obtain broad consensus among the governments of the Länder and the federal government. In fact, it was passed unanimously. According to the current estimates, the reform should increase the financial resources of all the Länder. Switzerland is also studying an extensive reform of equalization which currently does little to narrow the disparities in financial capacity among cantons. Equalization among cantons works largely through conditional transfers with the federal funding rate being higher for cantons with a lower financial capacity. However, the more affluent cantons nonetheless obtain the lion’s share of these transfers because of their greater ability to pay. In addition, financial relations among governments are, from the point of view of many observers, entangled, impeding the autonomy of the cantons. Accordingly, pressure for reform is in the direction of greater fiscal responsibility of the cantons, streamlined tasks and stronger equalization (of revenue instead of spending) so that it plays its role more effectively. In Switzerland, the role of the cantons is such that a reform cannot be adopted without their support. This power of the cantons substantially reduced the scope of the fiscal harmonization law that became effective in 2001. The reform of equalization is being negotiated with the active participation of the canton governments. The myriad inter-canton bodies have studied and ratified the proposal throughout the process. In any event, a canton government can hold a referendum to block or slow the implementation of such a reform if it can convince seven other cantons to support it or if it gathers enough signatures within the canton. It is worth noting that since November 2000, the proposal stipulates compensation for cantons that would be worse off financially because of the reform. In the United States, the 1996 reform of social assistance, in particular the Temporary Assistance to Needy Families (TANF) program, has substantially changed inter-governmental funding of income support programs. This was in response to the failures of the earlier system, a growing anti-Washington sentiment, problems with federal public finances and the demands of state governors for more flexibility in the administration of programs. This reform moved from a shared-cost funding model in this field to block funding in which the amounts paid depend on the amounts granted under the programs replaced by the reform. The reform was developed in close cooperation with the National Governors Association. The legislation on unfunded mandates was passed in 1995 in a similar context. One of the reasons for the reform in Australia was the desire for more stable and growing funding for health and education, in particular. The reform replaced a system of unconditional equalization transfers (Financial Assistance Grants) with access to the genera...
View Full Document

Ask a homework question - tutors are online