Relation between Long-term Liabilities and Selected Indicators in the Case of Municipalities with Extended Powers in the South Moravian Region

Abstract

The purpose of this article is to summarise data on long-term liabilities in municipalities with extended powers in the South Moravian Region and to determine whether these long-term liabilities correspond to the number of subsidized organizations and the rate of transfers to the income in the budget of the municipality. It is assumed that long-term liabilities per capita will be higher in municipalities with a larger number of subsidized organisations and that they will be higher in the case of municipalities with a higher rate of transfers to their budget income (i.e. in the case of municipalities that are less financially self-sufficient). Data provided by the Ministry of Finance of the Czech Republic was used which was processed via statistical methods (descriptive statistics, correlation analysis and cluster analysis). Subject to the calculation of correlation coefficients, only the transfer ratio was usable for the cluster analysis because the value of the correlation coefficient between the long-term liabilities per capita and the number of subsidised organisations showed insignificant dependency. Therefore, we were unable to prove our assumption number one, that long-term liabilities if expressed on a per capita basis would be higher in the case of municipalities which operate a higher number of subsidized organisations. However, the outcomes of the cluster analysis did not confirm the second assumption. All we could declare was that extreme values appeared to have grouped up: municipalities with the highest (or lowest, as the case might have been) values of the long-term liabilities per capita showed the highest (or lowest, as the case might have been) transfer ratio.

The purpose of this article is to summarise data on long-term liabilities in municipalities with extended powers in the South Moravian Region and to determine whether these long-term liabilities correspond to the number of subsidized organizations and the rate of transfers to the income in the budget of the municipality. It is assumed that long-term liabilities per capita will be higher in municipalities with a larger number of subsidized organisations and that they will be higher in the case of municipalities with a higher rate of transfers to their budget income (i.e. in the case of municipalities that are less financially self-sufficient). Data provided by the Ministry of Finance of the Czech Republic was used which was processed via statistical methods (descriptive statistics, correlation analysis and cluster analysis). Subject to the calculation of correlation coefficients, only the transfer ratio was usable for the cluster analysis because the value of the correlation coefficient between the long-term liabilities per capita and the number of subsidised organisations showed insignificant dependency. Therefore, we were unable to prove our assumption number one, that long-term liabilities if expressed on a per capita basis would be higher in the case of municipalities which operate a higher number of subsidized organisations. However, the outcomes of the cluster analysis did not confirm the second assumption. All we could declare was that extreme values appeared to have grouped up: municipalities with the highest (or lowest, as the case might have been) values of the long-term liabilities per capita showed the highest (or lowest, as the case might have been) transfer ratio.