LOCAL BUDGET INCOME AND EXPENDITURE AS A DEVELOPMENT OF TERRITORIAL COMMUNITIES

Array

Authors

  • T. Taukesheva Budget and Finance Department of Kharkiv City Council
  • G. Daudova Kharkiv Regional Institute of Public Administration National Academy for Public Administration under The Presi-dent of Ukraine

Keywords:

financial decentralization, local budgets income, local communities development

Abstract

In the context of financial decentralization, the existing mechanism for filling local budgets and spending needs to be further refined. This is because the newly introduced sources of local budgets filling are not budget making and have a low level of influence on the solvency of local self-government. Besides significant financial resources of local budgets are directed to the financing of state powers, which are transferred to local budgets without a corresponding compensator.

The purpose of the article is to highlight the practical principles of the formation and use of local government financial resources, as well as to substantiate proposals for achieving real autonomy of local budgets.

The tax sources reformatting, revision of the mechanism of budget equalization and introduction of new transfers contributed to increase of the financial resource of local self-government bodies at the initial stage of financial decentralization.

However, the influence of the decisions on the economic development of territorial communities is not taken into account in the public administration decision-making process in the field of taxation. The transport tax from individuals and legal entities does not meet the principles of economy of taxation and fiscal sufficiency. The introduction of payment for the issuance of a license to conduct business activities for the issue and holding of lotteries does not affect the solvency of local self-government. The efficiency of administrative fees and payments transferred to the local level in the process of transformation of public finances is low. The dependence of local budgets on intergovernmental transfers preserves the existing mechanism of government influence on local financial management.At the same time, the practical application of the principles of decentralization is accompanied by the redistribution of managerial, social and other functions between the state and local authorities in the field of education, health care, social protection, etc. with no transfers of financial resources.As a result, the increase of the resources of local budgets does not ensure the socio-economic development of the infrastructure of territorial communities. The replacement of the functions of local self-government bodies by the functions of the state reduces the effectiveness of public power.Issues that arise in the process of implementation of income and expenditure parts of local budgets necessitate the implementation of financial stabilization measures. These measures aimed at achieving the optimal level of distribution of financial resources and strengthening the tax potential of the territorial community, as well as structural restructuring of the tax system and optimization of intergovernmental transfers.

Author Biographies

T. Taukesheva, Budget and Finance Department of Kharkiv City Council

Ph.D., Associate Professor,

Honored Economist of Ukraine, Deputy Mayor of Kharkiv, Director

G. Daudova, Kharkiv Regional Institute of Public Administration National Academy for Public Administration under The Presi-dent of Ukraine

Ph.D., Associate Professor of Departament

References

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Published

2019-12-28

How to Cite

Taukesheva, T., & Daudova, G. (2019). LOCAL BUDGET INCOME AND EXPENDITURE AS A DEVELOPMENT OF TERRITORIAL COMMUNITIES: Array. Municipal Economy of Cities, 7(153), 12–17. Retrieved from https://khg.kname.edu.ua/index.php/khg/article/view/5472