Finance without romances

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.

Although the regions of the Far East, of course, differ from each other. As one would expect, the sharpest jumps are characteristic of the budgets in Chukotka. For example, in 2010, the tax and non-tax revenues of municipalities there almost halved. Even at the end of 2013, the volume of its own revenues to the municipal budgets of Chukotka remained less than in 2009. Although at the same time Chukotka again began to outstrip 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 we consider all the differences between the regions, then the only relatively difficult year was 2012. Then the income base of local self-government in the Magadan Region and the Jewish Autonomous Region was significantly reduced, and Sakhalin was also distinguished by a slight decline. As a result, for example, the own revenues of the municipalities of the Trans-Baikal Territory in 2013 for the first time began to slightly exceed the revenues in 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)

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.

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

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.

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.

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).

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%.

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,%).

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.