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Jurnal UMP Social Sciences and Technology Management
Vol. 3, Issue. 1,2015
Examine and Prioritize Factors Affecting Stable Revenues
of Municipality of Borujerd-Iran
Ataalloh Mohamadi Malgharni,
Department of accounting, Islamic Azad University, Sanandaj Branch, Kordestan, Iran
Maryam Shaabani
M.A of Business Management, College of Sanandaj, Islamic Azad University, Sanandaj Branch, Kordestan , Iran
Abstract
This study examines the factors affecting stable revenues and prioritizes these factors
concerning stable revenues of municipality of Borujerd. The statistical population (n=345)
consists of finance staffs of municipality in municipalities of Borujerd. The sample size (174)
has been selected among the statistical population using stratified random sampling method.
The research questionnaire consists of 25 questions, and as the result the factors affecting
stable revenues indicated internal consistency and stability of questionnaire. According to
findings of research, Borujerdcounty has had a relatively suitable status in the variable of
factors affecting stable revenues and its dimensions. factors affecting stable revenues had
means greater than average level, and t-test has confirmed significance of findings. Yet, price
of services with mean(4.76) and ownership of assets with mean(3.11) have been ranked the
first and last, concerning the factors affecting stable revenues.
Keywords: Cost of urban facilities, renovation complications, value – added tax, annual
automotive complications, sale, municipality of Borujerd
Introduction
As the result of dependence of municipalities' revenues on central government and
intensification of problems in cities due to natural growth of population and emigrations as
well as high volume of demand for municipal services and dependence of municipalities on
instable revenues in recent decades, working conditions have become worse for custodians
in municipalities, obliging them to stable revenues as much as possible. If urban
management seeks to keep up with revenues and trust on earning revenues, it must think
about having urban stable revenues in order not to expose qualitative conditions of city to
danger. In this regard, municipalities must seek to use permanent and stable financial
resources rather than revenue resources that might saturate in a near future. If looking
into financing city security planning and management with this view, the necessity to bring
about major changes in urban revenue will be confirmed, because the revenue acquired of
congestion that major part of cost of cities are met by relying on it is severely instable,
unless tending to remove urban architecture.
Research importance
Today, sustainable development for metropolises is an unavoidable need, where
stable revenues have been regarded as the most important factor to achieve it. In recent
decades, urban management in Iran increasingly has faced numerous challenges which
derive from various social, cultural, legal, financial, political and administrative factors
(Moezi Moghadam, 2004). In general, revenues of municipality are provided via stable and
instable revenues. Instable revenues imply the revenues without stability, relying on the
housing status as well as economic conditions which go on in the country, and the
municipality cannot predict a fixed budget based on them. In urban economic perspective,
expanding range of activities of municipalities and enhancing people's expectations and
increasing the problems arisen from increasing urban population intensify the need to
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Jurnal UMP Social Sciences and Technology Management
Vol. 3, Issue. 1,2015
expansion of financial and revenue resources of municipalities (Ghaledar, 2004). In recent
years, due to lacking suitable financial resources and necessity to providing services, major
deal of municipalities' stable revenues have been obtained through instable revenue
resources; yet if urban management seeks to move in framework of principles of
sustainable development, it must focus on stable revenues of which it can refer to
complications of urban civil and renovation.
In other words, the municipality must seek to stable revenue resources to receive real
complications. Municipalities must seek to use permanent and stable financial resources
rather than revenue resources that might saturate in a near future. If looking into
financing city security planning and management with this view, the necessity to bring
about major changes in urban revenue will be confirmed, because the revenue acquired of
congestion that major part of cost of cities are met by relying on it is severely instable,
unless tending to remove urban architecture. This is in a way that receiving complications
from citizens can be received at all periods of time. For instance, complications of
renovation can be received per year based on extent to which infrastructure of building is,
but congestion has revenue for once, and it cannot be regarded as a long-term resource.
Hence, the necessity to have stable urban revenues is required to manage municipalities.
Aliabadi& Masoom(2003) by an overview on revenue resources of municipalities have
concluded that instable revenue resources have a negligent share in financing
municipalities. Hence, revenue of municipalities must move towards stable and regular
resources, and instable revenue resources must be replaced with stable and continuous
resources. In this sense, it requires putting an emphasis on identification of financial
resources and the approaches for stable revenues of municipality of Borujerd.
Aims of research
Major aim:
Identify factors affecting stable revenues and prioritize the factors for stability of
revenues of municipality of Borujerd
Secondary aims:
1-Identify effect of cost of urban services on stable revenues of municipality of Borujerd
2- Identify effects of modernization on stable revenues of municipality of Borujerd
3- Identify effects of complications derived from taxes on added-value on stable revenues of
municipality of Borujerd
4-Identify
effect
of
annual
automobile
complications
on
stable
revenues
of
municipality of Borujerd
5- identify effect of sale congestion on stable revenues of municipality of Borujerd
6- Identify effect of ownership of assets on stable revenues of municipality of Borujerd
7- Prioritize factors affecting stable revenues of municipality of Borujerd
Domestic research
Aghaei et al.(2011) in a study examined the factors relating to stable revenues of
municipality of Tehran, and used several major components entitled increasing
complications on value of ground, financing methods, state aids and so forth as the factors
affecting stable revenues of municipality of Tehran, and taken step to identify and
prioritize them, and concluded that the aforementioned factors have been effective in
stable revenues of municipality of Tehran.
83
Examine and Prioritize Factors Affecting Stable Revenues of Municipality of Borujerd-Iran
www.jsstm-ump.org
Kashkooli(2010) in a descriptive-analytic study examined the ways to finance stable
revenues of municipality of Iran, for which they considered the major components
including complications, sale of services, borrowing and etc., and concluded that the
aforementioned factors have been effective in stable revenues of municipality of Iran.
Ayat Elahi(2008) announced that the first limitation to resolve urban problems and
inefficiency of providing services for citizens derived from lacking financial resources is
adequate.
An investigation into stable revenues of municipality clarified that stable revenues of
municipality have a negligent share in financing municipalities, thus municipalities must
move towards stable resources, and instable revenue resources must be replaced with
stable and receivable revenue resources(Ali Abadi & Masoom, 2003).
Evaluation of taxes as a major revenue resource has represented three major aims
including transfer of resources from private sector to public sector, fair distribution of costs
in various levels and increasing economic growth for taxes(Pechman, 1987).
The most important challenge in urban management in millennium will be grounded
on costs, and earning revenues will be centered at policy makings in local management
(Martin, 1997). Further, optimal combination of financial resources of municipalities
includes a set of sale of urban services and goods, various types of taxes and complications
and state aids. Comparing municipality of Tehran city and municipalities of U.S, it can say
that the greatest revenue resource of municipality of Tehran derives from construction,
and state aids develop little percent of revenue resource of municipality of Tehran; yet,
substantial percent of revenues of municipalities of U.S derive from state
aids(O.Sullivan,2003).
Conceptual model of research
Stable revenue implies the revenue that can be affected by external factors such as
economic crises, political developments, social problems and so forth, or prediction of it
will be possible for several years in future. Instable revenues will be exposed to fluctuation
in recession and development, resulting in budget deficit in recession. For this, using the
modern approach of urban economy, newer issues have been emerged which aim to
identify mechanisms of development and production of stable resources to provide cost
needs at area of urban management. Proper control of city and providing suitable services
for citizens and conducting civil projects require achieving stable revenue resources.
Figure1-Conceptual model of research concerning article 29 of financial code of
municipalities
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Jurnal UMP Social Sciences and Technology Management
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Research method
The present research in terms of aim is an applied type of research, categorized as a
descriptive survey in terms of data collection. This research is an applied research as its
findings are used to resolve revenues problems of municipalities, and a descriptive research
as its variables are examined based on existing status.
Research scope
The research scope is considered at three time, place and subject dimensions. In the
present study, three scopes below have been introduced and defined:
Time scope
The present study has been conducted during six month from the early 2014.
Place scope
Place scope implies financial and administrative employees serving in
municipality of Borujerd to whom the questionnaires were given.
Subject scope
The present study has examined and prioritized factors affecting stable revenues of
municipality of Borujerd.
Examine the research hypotheses using regression model
In this section, six factors(research hypotheses) have been considered as independent
variables, and stable revenues have been considered as dependant variable, in order to
observe whether all these six factors affect stable revenue or not.
Table 1. regression for the effect of six factors on extent of stable revenue
Sum of
Freedom
Mean of
f-value
squares
degree
squares
Regression
60/64
6
00/10
01/64
Residual
361/456
302
0/06
Sum
260/622
302
Significance
level
0/000
According to significance level(0.004) which is less than 0.05, it can say that there is a
significant relationship between six factors and extent of stable revenue of
municipality of Borujerd.
Table 2. coefficients of factors affecting stable revenues of municipality of Borujerd
Value of
Standard error
t-value
Significance
coefficient
level
Price of services
1/233
1/006
3/635
1/130
Complications of
1/322
1/111
2/201
1/114
renovation
Taxes of added1/223
1/033
3/666
1/111
value
Complications of
1/301
1/001
3/020
1/102
automotive
Sale of
1/262
1/363
2/163
1/111
construction
Ownership of
1/220
1/122
3/561
1/111
assets
As significance level for each six factors is less than 0.05, thus each four factors affect
stable revenues of municipality of Borujerd.
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Examine and Prioritize Factors Affecting Stable Revenues of Municipality of Borujerd-Iran
Model
0
Table 3. approved model for factors affecting stable revenues of
municipality of Borujerd
Correlation
determination
Adjusted
coefficient
coefficient
determination
coefficient
a1/642
1/306
1/026
www.jsstm-ump.org
Standard
error
0/06750
The result from research hypotheses
The results from this hypothesis indicate that increasing and receiving the cost for
urban services lead to increasing stable revenues of municipality of Borujerd. It is
suggested to develop teamwork to identify the latent potential in municipality of Borujerd
in form of attracting revenue resources and take step to identify new revenues, and finally
to implement benefits and costs concerning used revenues. The results from this
hypothesis( complications of renovation) indicate that complications of renovation result
in increasing stable revenues of municipality of Borujerd. It should be noted that as the
land is a real property, thus it can be easily identified, and this causes less problems in
emergence of construction complications, whereby it is suggested to use these
complications to supply stable revenues of municipality of Borujerd.
The results from this hypothesis(taxes on added-value) indicate that taxes on addedvalue cause increasing stable revenues of municipality of Borujerd. It is suggested to train
empowerment of employees to identify stable revenues of municipality of Borujerd as taxes
on added-value is available in internal space of city for citizens.
The results from this hypothesis (complications of automotive) indicate that
complications of automotive cause increasing stable revenues of municipality of Borujerd.
As automotive is a real property, and due to increasing number of automotives, the
coordination between regulatory controls and concerned organizations caused the owner
of automotives to take action to pay for complications.
Suggestions
The approaches as follows are represented to empower urban management of
municipality of Borujerd:
1-moving towards creation of more sustainable revenue using civil credits and
definition of revenue plans
2-expanding Taxi system throughout city which causes rise of revenues such as
complications of taxi license for municipality of Borujerd and providing services for
citizens
3-developing supervision on all existing activities through improvement of quality
management system and use of modern quality management systems
4-allocating civil credits in the same way for all eight budget chapters and
conducting particular studies by getting help from consultants
5-specifying area and capita of all users as modern information banks for using in
providing urban development plans
6-exapnding sports and entertainment spaces concerning existing empty spaces in
city to increase urban capita
7-long term and middle term planning to develop city in parallel to effective demand
for housing in the city which provides complications of construction licenses and
renovation complications for municipality of Borujerd
8-conducting comprehensive studies in the context of existing passages in qualitative
and quantitative perspectives
9-strengthening infrastructural plans and providing services such as urban drainage
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Jurnal UMP Social Sciences and Technology Management
Vol. 3, Issue. 1,2015
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