The financial results of decentralization: how local budget revenues exceeded expectations

Финансовые результаты децентрализации: как доходы местных бюджетов превысили ожидания

Финансовые результаты децентрализации: как доходы местных бюджетов превысили ожидания

The centralization of power that was inherent in our country before the proclamation of independence of Ukraine took place and after. Centralized management limits the system to develop and, eventually, leads to its destruction. Accordingly, centralized planning and control could never and cannot function efficiently, which was reflected in the imbalances of funding.

Decentralization is the polar opposite of centralization and is a complex concept, which can be opened through his influence on the administrative-territorial structure of the state system of public administration, the distribution between them of the functions, powers and financial resources.

A persistent problem in Ukraine, occurred on the background of centralization is to ensure the rights of every inhabitant of the village or town on modern medicine and education, accessible and quality administrative, communal, social services, good roads, clean and light streets. But citizens can influence the quality of these services only when the responsible for organizing and providing a number. Nearest to the people of power are the bodies of local self-government. Therefore, they should have a broad mandate and sufficient means to influence the decision of all problems of the local community and to bear for it responsibility.

To do this in Ukraine is decentralization — the transfer of authority and finances from the government closest to the people — local government.

To assess the potential of local governments to ensure the rights of citizens, analyze the financial results of local budgets in 2018.

As reported by the State fiscal service of Ukraine on its official website, for 2018 in local budgets of funds in the amount 230,5 billion. Compared to the 2017 year revenues increased by 21.6%, or 41 billion. For the 12 months 2017 in local budgets was directed 189,5 billion.

In December of last year, local budgets received UAH 20.8 billion, or 18.7%, or 3.3 billion more than December 2017.

Taxes and fees on income of physical persons in the consolidated budget for the 2018 paid 229,9 billion. The figure of 23.8%, or by UAH 44.2 billion exceed revenues in 2017.

In December 2018 payers 252 billion UAH of taxes and dues on income of physical persons, which is 19.7%, or 4.1 billion more than December 2017.

Payment for the land enrolled 27.3 billion UAH, which is almost 1 billion UAH more than last year.

The actual income for a single tax amounted to 29.5 billion UAH (increased by UAH 6.2 bn or 26.5%).

The actual receipts of the excise tax on fuel is UAH 7.9 billion (up by UAH 0.8 billion or by 10.6%).

A significant number of regional projects financed from the state budget. And it is important that during January-December 2018 year to the General Fund of the state budget received (balance) 729,4 billion of payments, controlled by the DFS. This is a 15.2%, or 96.5 billion UAH more than in 2017.

In the General Fund budget in 2018 is aimed 390,6 billion UAH of tax payments, or 18.7%, or 61.5 billion UAH more than in 2017.

Customs payments in January-December of 2018 to the General Fund budget are listed in the amount 338,8 billion. This is almost 11.5%, or by 35 billion UAH more than the index of 12 months 2017.

In December 2018, to the General Fund of the state budget (balance) of 62.6 billion. This is by 11.2% or by UAH 6.3 billion more revenue December 2017.

Note that the development of the regions in the State budget to 2019 has more than 30 billion (in 2018 25.4 billion UAH). This was announced by Vice Prime Minister — Minister of regional development, construction and housing and communal services of Ukraine Gennady Zubko.

So, in the state budget-2019 pledged 7.7 billion UAH to the State Fund of regional development (GFRR). Funds will be used for the development of a New educational space in schools and kindergartens, the construction and reconstruction of medical, social, cultural and sports infrastructure. Mandatory in projects is 10% of the funds for sports infrastructure, 10% in energy efficiency measures for the educational and medical institutions, as well as 0.5 billion UAH — for the implementation of projects-winners of “national public budget”.

In support of the regions and communities also will receive funds:

  • EU programme to support the sectoral policy of Ukraine – UAH 0.5 billion. In 2018, the programme has selected 70 of the investment of the winning projects that will be implemented in the regions of Ukraine for the next years
  • subventions for the development of the infrastructure of the United territorial communities – UAH 2.1 billion;
  • subventions for implementation of activities aimed at the development of the health system in rural areas — 1.0 billion UAH. Additionally, more than 4 billion UAH — transition from 2018. Now in various stages of implementation — 517 projects new construction of ambulatory primary health care in all regions of Ukraine;
  • subventions for financing of construction, reconstruction, repair and maintenance of public roads of local importance, streets and roads of communal property in settlements 14.7 billion UAH;
  • subventions for social and economic development of individual territories to 4.7 billion UAH.

So, the new legislative framework for the support of reforms of decentralization significantly strengthens the motivation for inter-municipal consolidation in the country, created the necessary legal conditions and mechanisms for the formation of capable territorial communities of villages, settlements, cities, and also to combine efforts to solve pressing problems.

Also, have justified a new model of financial provision of local budgets, which received a certain autonomy and independence from the Central budget, and their content is growing every year, particularly in 2018, the growth was recorded at the level of 21.6%, or 41 billion.