Green MSP for the Lothian area, Alison Johnstone, has suggested that community bodies could be given control over taxes such as parking and allotment charges.
Ms Johnston is arguing that empowerment means the ability both to raise and spend funds to respond to local priorities.
Speaking in a debate on Government plans for a Community Empowerment Bill, Ms Johnstone laid out Green suggestions for the new legislation.
These include: increased support for councils to set up local energy companies to take direct advantage of renewable energy opportunities on council land and buildings, and the creation of democratically-controlled Common Good Trusts to manage common good funds
Ms Johnstone said: “Community empowerment is not just about handing out pots of money to spend; we must also give financial freedom to community bodies so that local people will see directly where their money is spent.
“I support the ambitions of this Bill, but we need a more coherent plan to decentralise power from Holyrood to councils and further to communities of all kinds.
“As Scotland prepares for a major decision on its future, now is the perfect time to refresh our local democracy as well.”
Midlothian Green Councillor Ian Baxter added: “This is a unique opportunity to give communities a real say in matters which affect them.
“People are fed up with what they see as decisions made remotely and foisted on them by politicians at all levels.
“Installing wind turbines for example, would be much less contentious if communities had ownership and were involved in every aspect of their development”