Introduction: As the main providers of public services, municipalities need predictable, stable, and adequate sources of revenue to fulfill their legal duties and implement developmental programs. In Iran, with the ongoing process of fiscal decentralization and the delegation of responsibilities to local governments, assessing the financial structure and sustainability of municipal budgets has gained increasing importance. In this context, the Municipality of Hamedan—one of Iran’s growing metropolitan areas—has faced serious challenges in recent years, including economic volatility, stagnation in the construction sector, declining private investment, and limited diversification of financial resources. Accordingly, the present study aims to analyze the revenue trends and assess the sources of municipal financing in Hamedan during 2009–2023 and to forecast the revenue structure for the fiscal year 2029 in order to provide a strategic perspective for financial decision-making and enhancing fiscal sustainability.

Methods: This study is applied and analytical in nature and adopts a descriptive–analytical approach. The data were collected from the financial statements and approved budget documents of Hamedan Municipality for the period 2009–2023. The revenue components were classified according to the Ministry of Interior’s official budget structure into seven main categories: general taxes and levies, specific duties, service charges and revenues of municipal enterprises, revenues from municipal funds and properties, government and organizational grants, public donations and endowments, and the sale of capital and financial assets. To analyze revenue trends and forecast future performance, the Ordinary Least Squares (OLS) estimation method and time-series regression models were employed. After adjusting for inflation, the data were analyzed in terms of average annual growth, volatility, and the share of each revenue group in the municipality’s total income, leading to the estimation of fiscal projections for 2029.

Results and discussion: The study results indicate that Hamadan Municipality’s revenues during the examined period exhibited considerable fluctuations. Revenues from specific levies, with an average growth rate of 34.2%, were more volatile than general levies, while revenues from service fees and income from profit-making institutions increased by 35.9%. Revenues generated from municipal funds and properties grew by 61.3%, particularly after 2017, playing a significant role in resource mobilization. Government and public organization grants, despite an average growth of 24.2%, were unstable and lacked consistent reliability. Grants, donations, and other assets showed an average growth of 33% but experienced a sharp decline in 2022. Revenues from the disposal of capital assets increased by 43.8%, mainly during periods of budgetary constraints, whereas revenues from financial asset disposals grew by less than 1%. Based on the OLS predictive model, revenues for each income code have been forecasted over a five-year horizon to 2029, indicating that the revenue structure of Hamadan Municipality is expected to maintain a similar pattern and approximate share distribution until that year. In this forecast, the major sources are projected to be general levies, capital asset disposals, and municipal funds and properties, while the share of other sources remains limited, highlighting the importance of focusing on sustainable revenue sources and systematic financial planning to mitigate economic fluctuations.

Conclusion: The findings reveal that Hamedan Municipality’s fiscal structure remains highly dependent on unstable and non-recurrent revenues, particularly from capital asset disposals, while sustainable income sources are still underdeveloped. Economic recession, high inflation, weak tax compliance, lack of innovative financial instruments, and limited fiscal transparency are among the key factors constraining revenue growth in recent years. Therefore, it is recommended that Hamedan Municipality strengthen its fiscal sustainability by diversifying revenue sources, expanding urban taxation mechanisms, improving asset management efficiency, and promoting public–private partnerships (PPPs) to enhance financial resilience and long-term stability.