Financial problems of the local level should be rationally solved at the expense of the respective budgets.
First, there is a need for a clear division of responsibilities for solving specific tasks between central and regional and local governments, and for a gradual compare and contrast essay now buy transition to decentralization of public finances. Thus, at the state level (from the state budget) should be financed only those expenditures that are related to the national needs: national defense, the maintenance of legislative and executive power, the development of basic science, the restructuring of the economy. Financial problems of the local level should be rationally solved at the expense of the respective budgets.
Therefore, it is necessary to distribute the sources of tax revenues between central and local governments in strict connection with the functions they perform, which should be reflected in the legislation on local self-government. In particular, local taxes could include property taxes, land tax, fishing tax, pollution tax, and possibly income tax. In any case, local authorities should finance up to 60-80% of their needs from their own tax sources.
Secondly, it is necessary to improve the mechanism of inter-territorial financial equalization. Practice has shown that such a method of regulating local budgets as the withdrawal of budget surpluses to the higher level budget and the application of individual approaches to setting standards for deductions from national taxes and fees has many disadvantages: it not only negatively affects the revenue base of local budgets, but also deprives local authorities incentives to increase their revenues.
Based on foreign experience, it is necessary to create special budget funds for financial equalization of territories. And the redistribution of revenues between the budgets of one level would be appropriate to take into account the tax force of the territories and the minimum level to which the financial capabilities of these territories should be equalized. Therefore, today it is necessary to determine a reasonable standard of budget security of each region, district, city, taking into account the economic, social, natural and environmental condition of the respective territories. The existence of such indicators will make it possible to determine the actual amount of financial resources to meet the necessary needs of the regions, as well as significantly improve the budget planning procedure.
Thus, the solution of these and other problems related to the formation and use of local budgets would largely determine the expansion of economic independence of the country’s regions. After all, the extent to which they are politically independent and financially secure has a significant impact on the formation of democratic, market-oriented systems and increases the chances of success of reforms.
Local governments often face the need to make difficult choices about local taxes, the purposes for which their expenditures will be directed, and methods of managing and stimulating economic development. For this reason, the financing and formation of local government budgets is one of the most important areas of public finance, and therefore needs further research and the search for new approaches to reform.
The composition of expenditures of local budgets of Ukraine
Expenditures of local budgets are economic relations that arise in connection with the financing of own and delegated powers of local authorities.
Expenditures for the exercise of powers performed at the expense of local budgets, including transfers from the State budget are divided into:
expenditures that are determined by the functions of the state and can be delegated to the Autonomous Republic of Crimea and local self-government in order to ensure their most effective implementation on the basis of the principle of subsidiarity; expenditures for the implementation of the rights and obligations of the Autonomous Republic of Crimea and local self-government, which have a local character and are determined by the laws of Ukraine. primary health care, outpatient and inpatient care (district hospitals, outpatient clinics, medical and obstetric points); rural, township and city palaces of culture, clubs and libraries.
Group II – includes expenditures for financing budgetary institutions and activities that provide basic social services guaranteed by the state for all citizens of Ukraine and are carried out from the budgets of cities of the Republican Autonomous Republic of Crimea, cities of regional importance and district budgets.
This group includes expenditures on:
1) public administration:
a) financing of local self-government bodies of cities of the republican Autonomous Republic of Crimea and cities of regional significance; b) local governments of district significance.
a) preschool education (in the cities of the republican Autonomous Republic of Crimea and cities of regional significance); b) general secondary education: general educational institutions, including: schools, kindergartens (for cities of the republican Autonomous Republic of Crimea and cities of regional significance), specialized schools, lyceums, gymnasiums, evening (shift) schools; c) educational institutions for citizens in need of social assistance and rehabilitation: boarding schools, boarding schools for orphans and children deprived of parental care, orphanages (if at least 70 percent of the number of students in these institutions is formed on the territory of the respective city or district), family-type orphanages and foster families, assistance for children under guardianship and custody; d) other state educational programs.
3) health care:
a) primary health care, outpatient and inpatient care (general hospitals, maternity hospitals, ambulance stations, clinics and outpatient clinics, general dental clinics); b) health education programs (city and district health centers and health education activities).
4) social protection and social security:
a) state social security programs: shelters for minors (if at least 70 percent of the number of children in these institutions are formed in the relevant city or district), territorial centers and social assistance offices at home; b) state social protection programs: benefits for war and labor veterans, assistance to families with children, additional payments to the population to cover the costs of housing and communal services, compensation payments for preferential travel for certain categories of citizens; c) state programs to support the construction (reconstruction) of housing for certain categories of citizens; d) district and city programs and measures for the implementation of state policy regarding children, youth, women, families.
5) state cultural-educational and theatrical-entertainment programs (theaters, libraries, museums, exhibitions, palaces and houses of culture, schools of aesthetic education of children);
6) state programs for the development of physical culture and sports: maintenance and training of children’s and youth sports schools of all types (except schools of the Republican Autonomous Republic of Crimea and regional importance), activities in physical culture and sports and financial support for sports and sports organizations and sports facilities of local significance.
Group III includes expenditures on financing budget institutions and activities that provide state-guaranteed social services for certain categories of citizens, or financing programs that are needed in all regions of Ukraine and are carried out from the budget of the Autonomous Republic of Crimea and regional budgets …
This group includes expenditures on:
a) financing of representative and executive power of the Autonomous Republic of Crimea; b) financing of regional councils.
a) general secondary education for citizens in need of social assistance and rehabilitation: special general educational institutions for children in need of correction of physical and (or) mental development, sanatorium boarding schools; b) institutions of vocational education owned by the Autonomous Republic of Crimea and fulfilling the state order; c) higher education (higher educational institutions of I, II, III and IV levels of accreditation, which are owned by the Autonomous Republic of Crimea and jointly owned by territorial communities); d) postgraduate education (institutes of advanced training of employees of the socio-cultural sphere and agro-industrial complex, which are in communal ownership); e) other state educational programs.
a) primary health care, outpatient and inpatient care (hospitals of the Republican Autonomous Republic of Crimea and regional significance); b) specialized outpatient and inpatient care (specialized hospitals, clinics, hospitals for the disabled of the Great Patriotic War, orphanages, blood transfusion stations, etc.); c) sanatorium-and-spa care (sanatoriums for patients with tuberculosis, sanatoriums for children and teenagers, sanatoriums for medical rehabilitation); d) other state programs of medical and sanitary care (medical and social expert commissions, forensic bureau, health centers and sanitary education measures, other programs and measures).
Social protection and social security:
a) state programs of social protection and social security: assistance for the care of disabled people of groups I or II due to mental disorder; targeted social assistance to low-income families; payment of compensation to the rehabilitated; orphanages; training and employment of the disabled; nursing homes for the elderly and disabled, etc.; b) republican of the Autonomous Republic of Crimea and regional programs and measures for the implementation of state policy regarding children, youth, women, family; c) other state social programs.
Culture and art:
a) state cultural and educational programs (republican of the Autonomous Republic of Crimea and regional libraries, museums and exhibitions); b) state theatrical and entertainment programs (philharmonics, musical groups and ensembles, theaters, palaces and houses of culture of the republican Autonomous Republic of Crimea and regional significance, other institutions and events in the field of art); c) other state cultural and artistic programs.
Physical culture and sports: