Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
Kamchatsky
Moscow

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Finance without romances

Local self-government in the Far East: is there life in conditions of budgetary constraints?

Finance without romances

Having reviewed the totality of municipal budgets (i.e., the sum of urban districts, municipal districts and settlements), EastRussia.ru expert Rostislav Turovsky tried to figure out how much money was in the Far East and what they spent on. The work is based on calculations made by the author using the open data of the Ministry of Finance of the Russian Federation (according to the results of January-December of the corresponding year).

Rich and poor

The financial position of local governments is one of the most sensitive issues in the regional policy of Russia. It is well known that the subsidies of municipalities are off scale, and the requirements of municipalities to increase their own tax base do not find support at the top, because they upset the existing balance of relations between the federal and regional authorities. This leads to the scarcity of municipal budgets and the inability to solve their tasks. In the article devoted to regional budgets in the Far East, we, however, noted that the situation with their content looks very good in recent years. Therefore, it is important to understand whether there are similar positive trends at the municipal level. Our analysis shows that, on the one hand, the situation with the incomes of the Far Eastern municipalities looks positive. In 2013, local government revenues in the Far East exceeded 316 billion rubles. Their share in the total income of Russian municipalities was very good 9,3%. On the other hand, local government subsidies are striking: out of this money, the municipal and own tax and non-tax revenues amounted to a smaller part, namely, 94,3 billion, and this is only 7,1% of all tax and non-tax revenues of the municipalities of Russia. It should be noted right away that about a third of intergovernmental transfers in the Far East are absorbed by the municipalities of Yakutia, because of which, in essence, the volume of local government revenues in the Far East turns out to be so large.

The situation with own revenues of the Far Eastern municipalities can not be called stable, but the dynamics still have a positive character. Considering the situation after the crisis 2009, we notice that in recent years the volume of tax and non-tax revenues of the local government of the Far East has grown, and the growth rates exceeded the all-Russian ones. Only in 2013, these rates were slightly lower than in the country as a whole (108,3 and 109,8%, respectively). Even in the crisis 2009, when the incomes of municipalities in Russia fell, the Far East demonstrated a positive trend. The best growth rates, clearly exceeding inflation, were noted in 2010-11. After that they slowed down, but it is still difficult to say whether it's time to talk about the beginning of stagnation. At this stage, the situation with municipal budgets and their dynamics looks even better than with regional budgets.

Although the regions of the Far East, of course, differ from each other. As you might expect, the sharpest jumps are typical for budgets in Chukotka. For example, in 2010, tax and non-tax revenues of municipalities have almost halved. Even according to the results of 2013, the volume of own revenues to the municipal budgets of Chukotka remained less than in 2009. Although at the same time Chukotka again outstripped the outsider - the Jewish Autonomous Region, which occupied the penultimate place in 2010-11, but where there is no significant improvement in the situation Observed. If you consider all the differences between the regions, then the only relatively difficult year was 2012. Then the revenue base of local self-government in the Magadan Region and the Jewish Autonomous Region decreased significantly, and Sakhalin also distinguished a small recession. As a result, for example, the own incomes of the municipalities of the Trans-Baikal Territory in 2013 for the first time began to slightly exceed income on Sakhalin.

The most stable positive trends are shown by the municipalities of Yakutia with a constant increase in income, and the most significant in recent years. But most of all revenues are collected by the municipalities of the Primorsky and Khabarovsk Territories, which is not surprising, since it is there that the largest and more or less successful cities are located. Moreover, it is interesting that Primorsky Krai, with 2011, began to outperform its traditional competitor, who was previously the leader. At the same time, due to the steady growth of income to the two leading regions, Yakutia is gradually selected. On the contrary, the extremely weak financial base of local self-government in the Magadan region, which is not much better than that of the expected outsiders - Chukotka and the Jewish Autonomous Region, is striking.

Tab. 1. Tax and non-tax revenues of municipal budgets (bln. Rubles / index to the previous year)

2013

2012

2011

2010

2009

Far Eastern Federal District

94,3 / 108,3

87,1 / 105,85

82,3 / 112,25

73,3 / 112,3

65,2 / 108,15

Primorsky Krai

22,1 / 101,9

21,7 / 106,2

20,4 / 117,4

17,4 / 118,75

14,7 / 108,5

Khabarovsk Krai

21,8 / 107,4

20,3 / 106,1

19,1 / 107,6

17,8 / 116,6

15,2 / 106,7

The Republic of Sakha (Yakutia)

16,6 / 116,9

14,2 / 119,3

11,9 / 120,55

9,9 / 108

9,1 / 105

Trans-Baikal Territory

9,4 / 107,7

8,7 / 102,8

8,5 / 108

7,8 / 118,6

6,6 / 108,2

Sakhalin Region

9,4 / 106

8,8 / 97,7

9,1 / 101,6

8,9 / 107,9

8,3 / 103,6

Amur Region

9,1 / 112

8,1 / 106,5

7,6 / 113,9

6,7 / 115,85

5,8 / 100,3

Kamchatka

7,7 / 112,75

6,8 / 107,9

6,3 / 109,3

5,8 / 115,7

5 / 107

Magadan region

4 / 110,2

3,6 / 83,3

4,3 / 114,7

3,8 / 117

3,2 / 127,3

Chukotka

2,1 / 108

1,9 / 110,8

1,7 / 120,8

1,4 / 58,95

2,4 / 138,3

Jewish Autonomous Region

1,6 / 103,1

1,6 / 90

1,8 / 106,5

1,6 / 106,4

1,5 / 133,4

As already mentioned, the main part of the revenues of municipal budgets in the Far East is financial assistance, which comes from the regional level. Its volumes are volatile and often depend on the political preferences of governors, which also affects the overall situation. Nevertheless, the entire volume of municipal incomes (including transfers) in the Far East has also grown in recent years, and the growth rate has been increasing steadily since 2010 (this is the last unsuccessful year when there was no growth). As in 2012, and in 2013 years. The growth rates of municipal incomes in the Far East exceeded the average Russian (whereas in 2010-11 they lagged behind). As a result, the total municipal revenues in the Far East in 2013 reached 316,3 billion rubles (Table 2). And at the expense of massive subsidies, Yakutia (86,1 billion rubles) occupies a clear first place, significantly surpassing Khabarovsk Krai and other regions. It is interesting to note that due to large grants, the aggregate incomes of local self-government not only in Yakutia and Khabarovsk Krai, but also in Sakhalin exceed those in Primorsky Krai, where municipalities provide themselves more. And the Amur Region is not far behind Primorye.

Since the municipalities of Primorye, the regional authorities clearly do not spoil their subsidies, their incomes turned out to be unstable, they declined both in 2011 and in 2013. A small decrease in income was noted in 2013 and in Kamchatka. Clearly failed years were marked in Yakutia (2010 year), Magadan region (2012 year). The incomes of the municipalities of Chukotka declined both in 2009 and in 2010. The only region where municipal incomes have been growing all the last years was the Amur Region. It, along with Yakutia and Sakhalin, showed the largest, and impressive growth rates in 2013. But, as already mentioned, this growth is mainly due to the inflow of regional transfers. It is interesting that due to subsidies, the municipal budgets of Chukotka turn out to be "richer", even than in the Magadan region, not to mention the hopelessly lagging Jewish Autonomous Region. And municipal incomes in the Magadan region have not yet reached the level of 2010-11.

Table. 2. Incomes of municipal budgets (billion rubles / index to the previous year)

2013

2012

2011

2010

2009

Far Eastern Federal District

316,3 / 118,5

267 / 112,2

237,9 / 109,7

216,9 / 100,2

216,4 / 109

The Republic of Sakha (Yakutia)

86,1 / 131,6

65,4 / 111,35

58,8 / 120,75

48,7 / 88,55

54,9 / 118,7

Khabarovsk Krai

53,8 / 114,1

47,1 / 123,1

38,3 / 109,5

34,9 / 93,1

37,6 / 104,45

Sakhalin Region

45,4 / 131,5

34,5 / 114,3

30,2 / 89,6

33,7 / 111,3

30,3 / 98,3

Primorsky Krai

39,4 / 99,4

39,7 / 113,8

34,8 / 100

34,9 / 115,4

30,2 / 113,6

Amur Region

35,3 / 126,1

28 / 114,4

24,4 / 115,1

21,2 / 107,9

19,7 / 112,1

Kamchatka

27,9 / 100

27,9 / 109,4

25,5 / 136,2

18,8 / 101,3

18,5 / 107,7

Trans-Baikal Territory

27,5 / 116,5

23,7 / 95,8

24,7 / 111,5

22,2 / 101,2

21,9 / 121,6

Chukotka

12,2 / 114,3

10,6 / 116,2

9,2 / 112,7

8,1 / 82,7

9,8 / 96,7

Magadan region

11,8 / 118,4

9,9 / 78,4

12,7 / 99,6

12,7 / 113,9

11,2 / 105,2

Jewish Autonomous Region

4,5 / 119,3

3,8 / 93,4

4,1 / 103,2

3,9 / 91,6

4,3 / 122,95

Conditional "independence"

Primorsky Krai is the only region in the Far East where local self-government can be provisionally called financially self-sufficient (or poorly subsidized, which is the other side of the same coin). More than half of its income in 2013 made up its own tax and non-tax revenues (Table 3), incl. In urban districts - 63,5%. Relatively strong from this point of view, and the municipalities of the Khabarovsk Territory, whose financial autonomy exceeds 40%. But in the Khabarovsk Territory city districts are still actively subsidizing, as a result of which the share of their own incomes, unlike Primorye, does not exceed half.

In all other cases, the level of subsidy of the Far Eastern local government is higher than the average Russian level. It reaches its maximum limits in Chukotka and Yakutia, it is very large in Sakhalin, in the Amur Region and in Kamchatka. However, the conditional "independence" of the municipal budgets of the Trans-Baikal region, the Magadan region and the Jewish Autonomous Region (which provide themselves more than a third) is unlikely to please the municipalities themselves. As is clear from the above data, the volume of municipal revenues in these regions is small.

It is also important to note that the bulk of subsidies in all regions goes to the districts. Only in Primorye and the Khabarovsk Territory their financial independence exceeds 30%, whereas in Yakutia and Kamchatka it is lower than 15%, and in Chukotka it does not even reach 10%. On the other hand, it is noticeable that the authorities of many regions are poorly supporting their largest cities with finances. Obviously on fasting rations are, for example, Chita, Birobidzhan and even Anadyr. The urban districts of the Jewish Autonomous Region and Chukotka are more than half self-sufficient. The self-sufficiency of urban districts of Transbaikalia, Yakutia, and the Khabarovsk Territory is approaching 50%. On the contrary, the budget policy of the regional authorities of Sakhalin and the Amur Region looks more balanced, and in these regions all municipalities are distinguished by a high level of subsidies.



The policy of subsidizing settlements strongly varies from region to region. One extreme is the same Sakhalin, where the settlements provide themselves only at 9,5%. At the same time, in the Primorsky Territory, the Jewish Autonomous Region and Chukotka, there are few subsidies going to the settlement level, and they are forced to make ends meet to a large extent themselves (or rather, by 40-50%).

Thus, conventionally, the local government of the Far East can be divided into three groups. In the Primorsky and Khabarovsk Territories it can be called relatively strong and financially secure (the cities of Primorye lead here). In Chukotka and Yakutia, on the contrary, local government is fully subsidized, while receiving huge amounts of subsidies (especially municipal districts in these regions). Sakhalin, which is actively subsidizing all municipalities from its fairly grown budget, began to join these regions. Moreover, given that Yakutia and Chukotka largely live at the expense of federal subsidies, there arises a kind of subsidized vertical, when federal funds go to regional budgets, and from them are pumped to the municipal level. The intermediate group consists of all other regions. Of these, the Amur Region and Kamchatka are closer to the “subsidized vertical” regions. In Transbaikalia, the Magadan Region and the Jewish Autonomous Region, the financial autonomy of municipalities is formally higher, but they can be called “free” and “hungry” at the same time.

The income part of municipal budgets in the country as a whole and in the Far East in particular is formed, first of all, from the income tax (Table 3). And its share in the Far East (63,6% of the tax and non-tax revenues of the whole set of municipalities) exceeds that in the country (55,3%), which indicates a weak work on the collection of other taxes. The maximum dependence on income tax is demonstrated by the budgets of the municipalities of Chukotka and Sakhalin. On the contrary, the most differentiated from the point of view of the revenues of various taxes and fees are the municipal budgets of Primorsky and Khabarovsk krais, which differ in a more diversified economy. A notable situation is in such a raw material region as Sakhalin, whose revenues rose sharply due to income tax. But since this tax does not go to municipal budgets, the extraction and processing of raw materials does not bring much happiness to local self-government. As a result, the municipalities of Sakhalin remain deeply subsidized and receive funds from the growth of the regional budget, which they share in one way or another.

Given the weak development of agriculture and the low cost of land, it is not surprising that the role of land tax in the municipal incomes of the Far East (5,2%) is lower than the average Russian (10,4%). Land tax is allocated only in the southernmost region - Primorsky Krai (12,7%), and in other regions its role is minimal. It is slightly higher in Transbaikalia and the Amur Region, where there is a relatively significant agricultural sector.

At the same time, the situation with taxes on comprehensive income received by municipal budgets in the Far East, due to the quite good development of local business, looks quite positive. Their share is slightly higher than the nationwide (9,95% and 9,1%, respectively). Yakutia stands out to the greatest extent (15,9%), the situation with the collection of these taxes in the Khabarovsk Territory and in Kamchatka is good.

Table. 3. The main revenue sources of municipal budgets (%, January-December 2013).

Income tax (share in tax and non-tax revenues)

Taxes on aggregate income (share in tax and non-tax revenues)

Tax on property of individuals (share in tax and non-tax revenues)

The share of gratuitous income (share in total income)

Russia

55,3

9,1

1,5

61,1

Far Eastern Federal District

63,6

9,95

1

70,2

The Republic of Sakha (Yakutia)

65,9

15,9

0,9

80,7

Kamchatka

68,7

10,5

0,55

72,6

Primorsky Krai

56,9

7,4

1,2

43,9

Khabarovsk Krai

57,35

10,1

1,3

59,4

Amur Region

67,4

7,8

1,1

74,1

Magadan region

68,1

6,55

0,05

66,4

Sakhalin Region

76,6

8,9

0,6

79,3

Jewish Autonomous Region

62,5

6,8

1,1

64,1

Chukotka

80

8,75

0,1

83,05

Trans-Baikal Territory

65,5

5,6

1

65,9

Where does the money go

Expenditure policy of local self-government in the Far East in the context of budgetary constraints is reduced to the educational sphere and housing and communal services. Unsurprisingly, in comparison with other territories of the country, the significance of expenditures on housing and communal services in the macroregion is substantially higher. A particularly large share of municipal expenditures goes to housing and communal services in Chukotka and Sakhalin, where it is approaching 40%. Given the subsidized nature of local self-government in these regions, it turns out that the regional government, through large transfers, feeds the housing and communal services in their municipalities. However, in two other remote regions - in Kamchatka and in the Magadan region, the costs of local governments in housing and communal services are much more modest. Moreover, in a number of regions this share is even lower than the average for Russia - in Yakutia, Trans-Baikal and Primorye, and the Jewish Autonomous Region. In Transbaikalia, it does not even exceed 10%.

Thus, the policy of local governments in relation to financing housing and communal services is very different. In some regions, the housing and utilities sector receives large budget funding, and the main examples here are Chukotka and Sakhalin. In other regions, by contrast, housing and public utilities by the state and municipalities are financed very weakly, and this is most characteristic of the Trans-Baikal Territory.

After health care has almost entirely been financed from regional budgets, education remains the main social sphere, the content of which lies on the shoulders of municipalities. Its share is very large in the budget expenditures of all regions, only in two cases yielding utilities. More than half of municipal expenditures go to the educational sector in Primorye, the Jewish Autonomous Region and the Trans-Baikal Territory.

Municipalities have very little money for other directions. Costs for national issues, i.e. in fact, the maintenance of the authorities are the most impressive in the Jewish Autonomous Region, where the same tendency is typical for the regional level of government. This share looks significant in the Primorsky Territory and the Magadan Region. On the other hand, attention is drawn to very large differences in the share of expenditures on social policy (which are much lower in the Far East than in Russia as a whole). More attention is paid to this area in Kamchatka. In contrast, in Primorye Territory municipal spending on social policy is insignificant. In addition, Kamchatka is notable for the noticeable role of municipalities in financing road infrastructure.

Table 4. The main items of expenditures of municipal budgets (according to the results of January-December 2013 year,%).

Education

Housing and utilities

General issues

Social politics

Road facilities

Culture, cinematography

Russia

45,8

14,05

9

8,4

6,5

4,7

Far East Federal District

42,2

20,9

9,8

4,2

5,3

4,9

The Republic of Sakha (Yakutia)

48,1

12,5

9,4

4,1

3,5

5,9

Kamchatka

40

19,3

10,5

9,1

8,2

4,1

Primorsky Krai

54,15

12,9

12,4

1,6

6,7

4,45

Khabarovsk Krai

40,7

23,6

9,9

2,8

5

4,4

Amur Region

37,05

19,7

8,9

6

4,65

4,4

Magadan region

41

21,75

12

1,8

5,4

5,8

Sakhalin Region

30,7

37,8

7,3

4,9

6,6

4,8

Jewish Autonomous Region

51,2

12,3

16

2

6

5,8

Chukotka

30,1

39,8

9

2,6

2,9

4,8

Trans-Baikal Territory

54,4

9,9

10

2,75

7,1

5,05

The balance of municipal budgets in the Far East as a whole remains good, which is largely due to the usual state of savings. Regions in Russia receive more, spend more, are more often in debt. At the local government level, the situation is much more primitive. As a result of 2013, the municipal budgets of the Far East were reduced with a small surplus + 0,75%. The most noticeable surplus was recorded in the Amur Region and the Jewish Autonomous Region. At the same time, local self-government, despite the subsidies, still went into deficit on Sakhalin (-3,5%). Negative was the balance in the Primorsky Territory, where, on the contrary, regional authorities gave municipalities less grants.

Thus, the financial position of local government in the Far East at this stage can be considered satisfactory. Revenues of municipalities are growing, there is a very positive trend with their own revenues, which are usually combined with very large subsidies. On the other hand, the growth that takes place is not of a qualitative nature. The available revenues are still not so great as to solve all local problems in a comprehensive manner, but the Far East is no different from other areas of the country. Almost all the funds of local budgets are now absorbing the educational sphere and utilities. For the future, it is difficult to say whether regional budgets that are experiencing obvious and growing problems can continue to “save” local self-government through subsidies. In the coming years, municipalities may have to rely more on their funds, as is already happening in some regions of the Far East, and this, in turn, will create new difficulties in the implementation of local powers.

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