One of the forms of direct exercise of power is local self-government. Local government allows the use, possession and disposal of municipal property. Local authorities should:
- to maintain and dispose of residential and non-residential property (including kindergartens, school facilities, hospitals and other infrastructure);
- maintain utilities and provide services (supply of gas, electricity, water and so on);
- contain road facilities, carry out construction and repairs, solve other issues.
The most important objects of municipal authority are: land, real estate, industrial facilities.
To solve all these issues, self-government bodies should have the funds that make up the local budget structure. The sources of income in this case may be:
- taxes and fees, deductions and penalties that are sent to the local budget;
- rental income from property owned;
- subsidies;
- deductions from the income of municipal enterprises.
What is the local budget?
The local budget (the structure of income and expenses) has the same form as the state. Scientists in the field of economics give the following definition: the local budget is a whole complex of economic relations that ensures the distribution of national income within a particular region and forms the financial base at the local level. The budget allows to strengthen the financial independence and autonomy of local authorities, activates economic activity and the development of infrastructure in a particular territory.
The essence of the local budget
The basic concepts and structure of the local budget are set forth in the Constitution (Article 132). First of all, this article gives the right to local authorities to formulate, approve and further implement this budget. At the same time, such a budget is part of the consolidated budget, which is formed in a particular region.
The main task of the authorities in budgeting at the local level is to make the entire procedure as transparent as possible and balance all revenues and expenses. However, everything should happen within the framework of federal law.
In the structure of the local budget there are several revenue items that are distributed to exercise the powers of this government and solve problems arising at the local level. Based on the amount of income received, the issue of granting subventions to a specific region, settlement, city or village is being decided.
Responsibilities for data transparency by authorities
The composition and structure of the local budget are subject to mandatory official publication. Simply put, the local media should publish draft budgets, interim results, and information on how revenue is spent. Without fail, such informational publications should contain information on the number of local authorities, the amount of content of this apparatus.
If there is no regional print media in a particular area, the information should be published on the official website of the local government, and information can also be posted on information stands. The main thing is that the local population have the opportunity to get acquainted with the local budget, with information about its replenishment and cost items.
Local budget independence
The independence of the local budget structure is ensured by several factors:
- the presence in the region of its own source of income;
- the right of local authorities to independently determine where to spend funds;
- the opportunity to use additional income at your discretion;
- the right to receive compensation for additional expenses not stipulated by the budget that arose during the implementation of the local infrastructure development program and other activities of local authorities;
- full responsibility of representatives of local authorities for the execution and replenishment of the budget.
What does the local budget consist of?
At the heart of any local replenishment and cash expenditure plan are two components:
- revenue side;
- expenditure part.
Income in the form of taxes
In turn, this part of the local budget revenue structure consists of several parts.
Profit. These are actually tax revenues that go to the local budget and are clearly stipulated by the current legislation of the Russian Federation. The income of the village councils consists of land tax and tax, which is paid for the ownership of real estate by individuals. These revenues are the sole income of the village council.
It also includes a single agricultural tax on personal income, which is provided for by special regimes. But the local government leaves only part of these revenues in its budget. In particular, the agricultural tax remains at a rate of 30%, and tax payments from the profits of individuals at a rate of 10%. In municipal areas, a budget is formed in the same way.
The income structure of the local budget of urban districts has several differences. The revenue part is also generated from state fees in the amount of 100%. So, in the urban district remains 100% of the total agricultural tax, tax on temporary income.
Profit in addition to taxes
The following budget revenues can also be characterized as profit, but not related to the tax sphere. This may be income from own property.
The third component is all kinds of deductions (non-refundable and repayable), with the exception of subventions received from federal or regional funds. It can be penalties, donations and other income.
Expenditure part
The cost structure of local budgets also consists of several parts. First of all, this is the cost of the manufacturing sector. This refers to the costs of maintaining and modernizing the housing and communal services system. It also includes the costs of protecting the environment and developing the country's economy. For all these costs, as a rule, a fifth of the total budget is accounted for.
The cost of developing the state economy is the money allocated for subventions and road repair.
This part of expenses also includes:
- management finance;
- local elections;
- practical implementation of their own bills;
- fulfillment of orders at the local level;
- financial support for local economy;
- maintaining organizations at other levels of government;
- implementation of targeted programs that were initiated at the local level and are important for a particular region;
- payment of interest on loans;
- development of local infrastructure.
The main thing is that these expenses are covered by non-tax and tax revenues, that is, personal sources of financing. If there is a shortage, then a transfer can be used.
Consider the costs of implementing the tasks entrusted to local authorities. Usually, this item of expenses takes about 70% of all expenses. Of these, about 40% should be in education. The rest should go to improve the quality of work of municipalities, the development of culture and the social sphere.
The second part of the consumable part
This part of the local budget structure is aimed at:
- providing a guaranteed obligation to receive education on a free basis;
- ensuring the smooth operation of commissions on the problems of children under 18;
- distribution of income, their adjustment between settlements;
- social support for those who need the most help (disabled people, low-income families, veterans and orphans);
- subsidizing low-income families and citizens to pay utility bills;
- construction of new roads;
- solving environmental problems in the region;
- maintaining in good condition the library fund and so on.
It should be understood that the structure of state and local budgets can be very different. But in general, we can say that about 30% should go to the development of the social and cultural sphere, then comes the housing and communal services and so on.
Alignment of the level of budgetary security
It so happens that not every rural settlement, municipal district or other formations has an insufficient composition and structure of local budget revenues, that is, in fact they are not able to fully exercise their powers. In such cases, funding is provided through the provision of grants. Such transfers are irrevocable and free of charge.
The procedure for providing subsidies is regulated by the legislation of Russia, in particular, the budget code. In addition to the lack of budgetary funds, when determining the need for subsidies, the number of residents in a particular settlement is taken into account.
You should also be aware that in resolving this issue, higher authorities have the right to be guided exclusively by the methodology for determining the estimated budgetary provision. If this level turns out to be higher, then subsidies are supposed. When determining the need, it is forbidden to take into account actual expenses and income for the reporting period or forecasted indicators for the next period.
Partial allocation of subsidies per capita in a particular region is also possible.
Subsidies
Another type of inter-budget transfers. But unlike subsidies, the expenditure of subsidies is a completely controlled process, which is regulated at the level of legislation. Such assistance is issued in order to co-finance budgetary obligations, including financing of local budgets, most often for the implementation of a certain program. At the same time, the allocation of funds can be both from a subordinate (negative transfer), and from a higher budget.
Problems
Local authorities are as close as possible to the population, and the budget of a particular region is the primary level of organization of public authority. Municipalities are those bodies that are the pillar of democracy, supporting the stability of the entire state. However, it is no secret that it is at the level of local budgets that failures and problems most often occur that negatively affect the state of the entire society.
Today, there are a number of main problems:
- the ability to interpret the regulatory framework in a contradictory way;
- the mismatch between the powers of local authorities and financial resources;
- the imbalance of most municipal budgets;
- most of the regions have a small income because of the minimum amount of property, land and even a small population;
- irresponsibility of representatives of regional authorities.
But the biggest problem is the imbalance in the composition and structure of local budget expenditures and the material base of most regions. Addressing these issues requires a systematic approach and urgent action.