Public Finances of Soledad, Atlántico: An Atypical Case

Abstract

Although it is the seventh most populated city of Colombia and is classified in the first municipal category in accordance with Law 617 of 2000, Soledad, in the Department of Atlántico, has a low level of local fiscal revenues, compared with its peers of the same category, and, thus, also a low level of local public investment. Its financial situation improved in the period 2012-2014 due to the measures implemented under the Debt Restructuring Agreement of 2012. However, there is still a long way to go because its per capita local tax revenue is at the same level as that of rural towns with populations of under 10.000. For these reasons, in fiscal terms Soledad is an atypical case among Colombia’s largest cities. We examine the public finances of Soledad in terms of their evolution and current situation compared of cities of similar size and socio-economic characteristics, with the purposes of examining its still weak fiscal situation and, therefore, possible policies of easy implementation.