Ver.1

Interbudgetary relations are one of the main factors influencing the socio-economic development of the state. The ability of the state to perform its functions, and for the population, the provision of budget services, depends on how efficiently and expediently the responsibilities and financial resources are allocated for their implementation by budgets.

According to the Budget Code of the Russian Federation, interbudgetary relations are understood as the relationship between public legal entities on issues of regulation of budget legal relations, organization and implementation of the budget process.

Interbudgetary relations are based on the principles of: distribution and consolidation of budget expenditures at certain levels of the budget system of the Russian Federation; delimitation (fixation) on a permanent basis and distribution according to temporary standards of regulatory income by levels of the budget system of the Russian Federation; equality of budgetary rights of subjects of the Russian Federation, equality of budgetary rights of municipalities; equalizing the levels of minimum budgetary provision of the constituent entities of the Russian Federation and municipalities; equality of all budgets of the Russian Federation in relations with the federal budget, equality of local budgets in relations with the budgets of constituent entities of the Russian Federation.

In accordance with these principles, certain types of budget expenditures can be transferred from the federal budget to the budgets of the constituent entities of the Russian Federation and from the budgets of the constituent entities of the Russian Federation to local budgets.

Currently, a legislative distinction has been made between tax powers and revenue sources for budgets at different levels. However, at the same time, such important principles of inter-budgetary relations as the principle of budgetary balance, that is, the correspondence of budget revenues and expenditures, and the principle of budgetary independence remain unrealized. The main revenues are concentrated at the federal level. And although the Budget Code proclaims the principle of “single-channel direction”: one tax - one budget, more than 80% of tax revenues to the budgets of the constituent entities of the Federation are deductions from federal taxes. At the same time, the financial base of local budgets has especially narrowed. There are only 2 local taxes left - land and property tax for individuals. This is despite the fact that the spending powers of local budgets have expanded in accordance with recent legislative changes. These changes further exacerbated the imbalance of local budgets.

The problem of accounting and distribution of interbudgetary transfers. The need to strengthen their stimulating influence on the regional economy. The existing model of distribution of tax revenues by levels of the budget system assumes the special importance of various types of financial assistance from higher budgets to lower ones.

Only three quarters of the regions are subsidized.

An important problem in the provision of financial assistance from higher budgets is poor accounting of transfers, a significant part of which comes outside the system of budgetary relations and is not linked to the level of budgetary security of the regions.

Currently, interbudgetary transfers are concentrated in 5 funds (the Fund for Financial Support of Regions, the Compensation Fund, the Fund for Co-financing Social Expenditures, the Regional Development Fund, the Fund for Reforming Regional and Municipal Finance), which are formed and distributed on the basis of regulatory documents of the Government of the Russian Federation.

However, some transfers were and are allocated outside the framework of these funds. Thus, the principle of unity of the federal financial support system is violated. This problem is especially acute with investment financial assistance. Funds for investment purposes from the federal budget go to the regions in a variety of ways, outside of the five funds mentioned above. For example, these are subsidies for road infrastructure, funds for the construction of regional and municipal property under the Federal Targeted Investment Program, various regional parity programs, etc.

The existing model of distribution of interbudgetary transfers (as well as the model of interbudgetary relations in general) is capable of partially solving the problem of equalizing the financial security of territories, but is not capable of stimulating the economic development of territories. Regional authorities under such a system are not only not interested in the most effective use of their own capabilities, but are focused on a dependent model of behavior.

Currently, such types of financial assistance have already been tested and shown to be effective, which have a stimulating effect on the financial and budgetary policy of regional and local authorities. These are the Fund for Co-financing Social Expenditures to Accelerate the Rate of Housing and Communal Services Reform and the Fund for Reforming Regional Finances (subsidies from the Fund are provided to constituent entities of the Russian Federation selected on a competitive basis and are used to reform and improve regional finances, develop social infrastructure, increase the efficiency of budget expenditures, and support economic reforms It is necessary to expand this experience by defining the range of regional and municipal powers that may be suitable for co-financing, as well as establishing clear criteria and procedures for receiving this financial assistance.

Thus, one of the main reasons is the insufficiently effective system for distributing interbudgetary transfers between regions, which does not encourage regions to work hard in terms of optimizing their financial and economic resources and encourages dependency. Of course, there are certain positive changes in this direction, but they are still not sufficient to significantly change the situation for the better in the near future.

Var.2

Interbudgetary relations- these are financial relations between federal authorities, authorities of the constituent entities of the Federation and municipalities on issues of regulation of budget legal relations, organization and implementation of the budget process.

The presence of inter-budgetary relations is determined by the unequal economic development of specific territories. Some of them have rich natural resources, others have an important strategic position that determines their importance in the state. Natural resources belong to all citizens. This predetermines the need for redistribution in the interests of the state as a whole of the rent that these resources bring.

Additionally, industry has historically grown faster in some regions than in others. In the conditions of the economic crisis of 1992-1998, accompanied by a drop in production by almost 50%, the uneven development of specific regions increased significantly.

Financial aid

Financial assistance from the federal budget to equalize the minimum budgetary provision is provided to the constituent entities of the Federation, subject to the signing of an agreement on the execution of its budget through the Federal Treasury.

A subject of the Federation receiving financial assistance from the federal budget does not have the right to:

• provide budget loans in an amount exceeding 3% of its budget expenditures;
• provide government guarantees in an amount exceeding 5% of its budget expenditures.

Amount of financial assistance to a subject of the Federation is determined on the basis of standards of financial costs for the provision of public services.

These standards must be developed taking into account state social standards, i.e., the volume of services guaranteed by the state.

Subventions to the budgets of the constituent entities of the Federation are provided to finance targeted expenses, in particular:

• expenses transferred from budgets of other levels of the budget system;
• expenses for federal target programs;
• capital expenditures.

Subjects of the Federation can attract targeted budget loans to finance cash gaps caused by the seasonal nature of income receipts for a period of up to six months on reimbursable and gratuitous terms.

The Ministry of Finance of the Russian Federation and the Accounts Chamber of the Russian Federation have the right to audit the budget of a constituent entity of the Russian Federation - a recipient of financial assistance from the federal budget.

If a subject of the Federation receives financial assistance in the amount of more than 50% of the expenditures of its consolidated budget, then an audit of its budget is mandatory.

Financial assistance is provided to municipal budgets from the budgets of the constituent entities of the Federation.

This assistance is provided in the following forms:

• allocations to equalize the level of minimum budgetary provision;
• subventions to finance targeted expenses;
• budget loans to cover temporary cash gaps that arise in the execution of local budgets.

The audit bodies of the subject of the Federation that provides financial assistance have the right to audit the execution of the budget of the municipal entity that is the recipient of this assistance.

The law on the federal budget may provide for financial assistance not only to the constituent entities of the Federation, but also to the budgets of municipal entities.

Typically, such assistance is provided to finance targeted expenses provided for by federal programs or laws. Federal authorities have the right to audit the expenditure of funds received by municipal budgets from the federal budget.

Interbudgetary transfers

To increase the effectiveness of solving current problems of territorial budgets, interbudgetary transfers play an important role.

Interbudgetary transfers- these are funds from one budget of the budget system of the Russian Federation, transferred to another budget of the budget system of the Russian Federation.

Interbudgetary transfers are carried out through the Federal Fund for Financial Support of the Subjects of the Russian Federation, the Regional Development Fund, the Fund for Reforming Regional and Municipal Finance and the Compensation Fund.

Interbudgetary transfers currently existing in Russia can be divided into the following groups:

• non-targeted (block) subsidies to equalize budgetary security;
• targeted transfers;
• compensation payments.

The Budget Code of the Russian Federation defines the following forms of interbudgetary transfers:

• Budget loan- a form of financing budget expenditures, which provides for the provision of funds to legal entities or other budgets on a repayable and reimbursable basis;
• Subsidy- these are budget funds provided to the budget of another level of the budget system of the Russian Federation on a free and irrevocable basis. Subsidies are provided from the Federal Fund for Financial Support of Subjects of the Russian Federation. They are provided subject to compliance by state authorities of the constituent entities of the Russian Federation and local government bodies with the budgetary legislation of the Russian Federation and the legislation of the Russian Federation on taxes and fees;
• Subvention- These are budget funds provided to the budget of another level of the budget system.

The purpose and composition of interbudgetary transfers are formed on the basis of federal budget expenditures, taking into account changes in budget and tax legislation.

Interbudgetary transfers from the federal budget to the budgets of the budget system of the Russian Federation are provided in the form of:

• subsidies to equalize the budgetary security of the constituent entities of the Russian Federation; subsidies to the budgets of constituent entities of the Russian Federation;
• subventions to the budgets of the constituent entities of the Russian Federation;
• other interbudgetary transfers to the budgets of constituent entities of the Russian Federation;
• interbudgetary transfers to the budgets of state extra-budgetary funds.

The variety of types and types of transfers is due to their purpose in the practice of interbudgetary regulation. Thus, in relations between the central (federal) government and state or municipal governments, transfers usually perform the following functions:

• equalizing the budgetary provision of territories and ensuring uniform access to a guaranteed set of public services throughout the territory;
• compensation to lower budgets for the costs of financing events of national importance, the cost of which exceeds the revenue capabilities of these budgets;
• stimulating in the regions the provision of expanded social benefits to the population in volumes exceeding the level guaranteed by the state, in order to improve their standard of living and social security;
• encouraging the implementation of economic, social and political reforms by lower authorities on their territory;
• reducing social tension in the region, stimulating economic growth.

Var.3

Interbudgetary relations are a set of relations within the country's budget system, including as the main functional elements the differentiation of income and expenses between levels of the budget system, the distribution of income between levels of the budget system, as well as the redistribution of funds between budgets of different levels and types

Interbudgetary relations - budgetary relations between three levels of government: federal, constituent entities of the Federation and local governments

Consolidation of a certain order of movement of financial flows at the levels of the state budget system and the organization of economic relations arising in this regard constitute essentially the basis of the mechanism of budget regulation, through which federal, regional and local authorities and management perform their representative and executive functions in compliance with the requirements of formal financial independence of their policies from higher levels

Interbudgetary relations are based on certain principles. In the context of fiscal federalism, the most important of them are the following: 1. transparency (clarity, transparency, publicity) of interbudgetary relations; 2. mutual responsibility of the parties for the fulfillment of interbudgetary obligations; 3. clear regulatory regulation, excluding the possibility of bargaining and subjectivity in the distribution of budget funds; 4. ensuring guarantees of uniform access for citizens, regardless of their place of residence, to basic social benefits and services

Interbudgetary relations are the financial relationships of federal authorities with the authorities of constituent entities of the Russian Federation and municipalities in the process of formation and execution of budgets at all levels in accordance with their powers and the tasks and functions assigned to them.
The main goals of interbudgetary relations are:

1. improving living standards, ensuring social security and equal access of the population to public services and social guarantees throughout the country;
2. ensuring sustainable economic development with optimal use of the resource and tax potential of each region and the country as a whole;

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1. strengthening the state structure and territorial integrity of the country, preventing centrifugal tendencies and conflicts between authorities at different levels regarding the distribution and use of resources of the national budget system in the interests of implementing the long-term strategy of territorial development of Russia.

The subjects of interbudgetary relations are:

• delimitation and consolidation of spending powers at the appropriate levels of the budget system;
• delimitation of tax powers and revenue sources between budget levels;
• equalizing the budgetary provision of the constituent entities of the Russian Federation and municipalities, taking into account their spending powers and tax potential.

The main problem of improving interbudgetary relations at present is reducing the differentiation of socio-economic development of the constituent entities of the Russian Federation, which still remains very significant.
The grouping of regions of the Russian Federation on the basis of a comprehensive assessment of their socio-economic development and measures to overcome significant differences in the level of this development are given in the federal target program “Reducing differences in the socio-economic development of regions of the Russian Federation (2002 - 2010 and until 2015).
The criteria for the effectiveness of the model of interbudgetary relations should be:

1. increasing the economic potential of the region, its contribution to the national economy;
2. the quality and volume of budget services provided to the population of regions throughout the country.

Interbudgetary relations perform two main functions: equalizing and stimulating.
The equalizing function is designed to equalize the budgetary provision of those territorial entities where it is less than the required level (ensuring compliance with constitutional and other state social guarantees throughout the country) level.
The incentive function is designed to stimulate the increase in tax potential, timely and complete collection of payments to the budget in the subordinate territory, as well as their rational and efficient spending.
Both functions should be implemented mainly in combination. In our country, the equalizing function has become predominant at the expense of the stimulating one.
Therefore, since 2005, a new stage in the reform of interbudgetary relations began.
The main task is to overcome dependent sentiments and transform interbudgetary relations into a factor of economic growth both in individual territories and in the country as a whole.
But at the same time, it must be borne in mind that if the centralization of income at higher levels of the budget system leads to dependency, then the decentralization of income at the levels of the budget system must have a limit beyond which separatism can intensify, leading to a violation of the common economic space and combination national, regional and local interests.
The basis of interbudgetary relations is interbudgetary transfers.
Interbudgetary transfers are funds provided by one budget of the budgetary system of the Russian Federation to another budget of the budgetary system of the Russian Federation.
Interbudgetary transfers (with the exception of subventions) are provided subject to compliance by the authorities of the constituent entities of the federation and local governments with the budgetary legislation of the Russian Federation and the legislation of the Russian Federation on taxes and fees.
If the estimated share of interbudgetary transfers from the federal budget (except for subventions) during two of the last three reporting financial years exceeded 5% or more of the volume of own revenues of the consolidated budget of a constituent entity of the Russian Federation, then in relation to this subject restrictions and measures are applied that are established as the growth increases above the specified shares.
Similar types of restrictions and measures are applied to municipalities that receive interbudgetary transfers from the budgets of constituent entities of the Russian Federation.
Interbudgetary transfers are distributed in such a way as to stimulate the constituent entities of the Russian Federation to increase their own revenue base, improve the quality of regional financial management and improve the procedure for providing investment support to the regions.
The main forms of interbudgetary transfers are grants, subsidies and subventions.
A subsidy is a form of budgetary allocations to equalize the budgetary security of the constituent entities of the Russian Federation (if the allocations come from the federal budget) or municipalities (if the funds come from the regional budget).
Subsidies from the federal budget to equalize the budgetary security of the constituent entities of the Russian Federation form the Federal Fund for Financial Support of the Subjects of the Russian Federation. The distribution of subsidies from this fund is carried out in accordance with a unified methodology approved by the Government of the Russian Federation. Subsidies from this fund are provided to those constituent entities of the Russian Federation whose level of estimated budgetary provision does not exceed the level established as a criterion for equalizing the estimated budgetary provision of constituent entities of the Russian Federation.
The minimum level of estimated budgetary provision of the constituent entities of the Russian Federation, taking into account subsidies for equalizing the budgetary provision of the constituent entities of the Russian Federation, is determined for a period of at least 3 years.
The level of estimated budgetary security of a constituent entity of the Russian Federation is determined by the ratio between the estimated tax revenues per capita, which can be received by the consolidated budget of a constituent entity of the Russian Federation based on the level of development and structure of the economy and (or) tax base (tax potential), and similar indicators on average for consolidated budgets subjects of the Russian Federation, taking into account the population structure, socio-economic, geographical, climatic and other objective factors and conditions affecting the cost

provision of the same volume of state and municipal services per resident.
A subsidy is a form of budgetary allocations to co-finance expenditure obligations by budgets of different levels.
The totality of subsidies to the budgets of constituent entities of the Russian Federation from the federal budget forms the Federal Fund for Co-financing Expenses.
The goals, conditions for the provision and expenditure of subsidies to the budgets of constituent entities of the Russian Federation, the criteria for selecting constituent entities of the Russian Federation for the provision of interbudgetary subsidies and their distribution among the constituent entities of the Russian Federation are established by federal laws and (or) regulatory legal acts of the Government of the Russian Federation adopted in accordance with them for a period of at least 3 years .
A subvention is a form of budgetary allocations provided to financially support the powers of higher-level authorities transferred to another budget level.
The totality of subventions to the budgets of constituent entities of the Russian Federation from the federal budget forms the Federal Compensation Fund.
Methods for distributing subventions from the federal budget are approved by the Government of the Russian Federation on the basis of the Budget Code of the Russian Federation, federal laws and regulations of the President of the Russian Federation and the Government of the Russian Federation.
Other interbudgetary transfers may be provided by the budget of the Russian Federation in cases and in the manner provided for by federal laws and (or) regulatory legal acts of the Government of the Russian Federation adopted in accordance with them.
Similar funds are formed in the expenditure side of budgets at other levels.

To perform their functions, the authorities of the constituent entities of the Russian Federation and local governments need financial resources. The source of funds is economic activity. Authorities carry out their own economic activities on a small scale and cannot count on high income through this channel of funds. Therefore, a procedure has been established according to which they receive the bulk of their income from taxes and transfers from higher budgets.

Accordingly, the economic base of financial resources of the constituent entities of the Russian Federation consists of:

• property owned by a constituent entity of the Russian Federation;
• funds from the budgets of the constituent entities of the Russian Federation and territorial state extra-budgetary funds of the constituent entities of the Russian Federation;
• property rights of a subject of the Russian Federation.

A subject of the Russian Federation may own property for the exercise of powers, ensuring the activities of government bodies, civil servants, employees of state unitary enterprises and government institutions.

Budgets serve as a way to generate revenue sources and meet spending needs.

Currently, 70% of expenditures on the national economy are financed from territorial budgets, 80% on education, 88% on healthcare, and 70% on social security. At their expense, new jobs are created and the labor of those employed in the public sector is paid.

At the same time, relationships are established between all levels of budgets: between federal and regional, between regional and local. Regional and local together are considered as territorial budgets. Interbudgetary relations are becoming the core of regional governance.

Every year, on the basis of uniform rules and regulations, budgets of all levels of government, income and expenditure items are developed, the budgetary provision of the population of the regions is determined, the amount of subsidies to budgets for its equalization, the primary distribution and final (after redistribution) use of financial resources. Primary incomes of territorial budgets are formed on the basis of tax revenues, as well as other own incomes, and final ones - after their redistribution through a higher-level budget. The amount of redistribution depends mainly on the volume of spending powers of the budget of each level, i.e. the volume of services the provision of which is entrusted to the appropriate level of management.

Expenditure powers- these are the rights and responsibilities of the relevant government authority to regulate and finance budget expenditures. They are determined by the list of functions the performance of which is entrusted to this body. Functions are distributed between management levels; delegation of functions is allowed with mandatory financial support.

Objects financed exclusively from the federal budget, budgets of the Russian Federation, budgets of municipalities, as well as jointly from budgets of different levels have been identified. The volume of financing is determined by direct calculation, as well as by standards, which are differentiated taking into account objectively determined geographical, climatic and socio-economic characteristics. Budget standards are used to calculate the volume of financial assistance to the region and largely determine the level and structure of budget expenditures of the constituent entities of the Russian Federation. For example, to justify the budgetary needs of the constituent entities of the Russian Federation and municipalities, expenditure standards for housing and communal services, primary and general secondary education, healthcare, public administration, child benefits, public transport, law enforcement, cultural institutions, and other standards are used.

Expenditure powers form the budgetary need for funds to finance them, i.e. financial obligations.

The Budget Code requires unity of spending powers and sources of their financing, i.e. revenue powers, the basis of which is the disposal of tax revenues.

Revenue powers regions are to mobilize tax and non-tax revenues into their budgets. Own tax and non-tax revenues cover a small share of the expenditure needs of territorial budgets. The bulk of their income comes from federal tax deductions. To do this, they are split according to the principle: one tax - three budgets. This makes it possible to equalize budget revenues, but only within certain limits, since the standards for deductions are uniform, and the tax base in each region is formed differently. For example, 17.5% of income tax goes to the regional budget. For one subject of the Russian Federation, this amount of revenue may be insufficient, and for another - excessive.

At the same time, even economically strong entities are recipients of funds (for child benefits, payments to veterans, wages for public sector employees, etc.).

A comparison of expenditure and revenue powers reveals level of budgetary provision of the region. It has little relation to the real needs of the region as a territorial unit or to the cost of the consumer basket, since it only indicates financial support from budgetary funds and is used to determine the amount of financial assistance to budgets.

Regions that do not receive any subsidies are considered donors; there are few of them - 10-12 (the number varies slightly from year to year). But from the territory of 35-40 constituent entities of the Russian Federation, where 2/3 of the population lives, more goes into the federal budget than is returned from it to the regions. Therefore, there are actually more donors. However, the vast majority of regions receive additional funds. Another budget lacks tax revenues in a ratio of 90:10 to finance spending powers.

Now the share of territorial budgets in the revenues of the budget system in Russia is greater than in other federal states. But this is not a consequence of the democratization of inter-budgetary relations, but of the overload of territorial budgets with “federal mandates”, i.e. obligations. It requires additional income in the form of deductions from federal taxes and financial assistance. Without taking this circumstance into account, the budget structure looks extremely centralized even by the standards of unitary states. And this is objectively due to the current tax system in a huge country with significant differences in the location of production by region. Almost 50% of all taxes are collected in 10 constituent entities of the Russian Federation, where 22% of the population lives. In order to have approximately equal provision of the population with at least budgetary funds, it is necessary to concentrate at least 85% of tax revenues in the federal budget, including 50% for redistribution. An alternative solution to this problem can only be differentiation of tax rates among the constituent entities of the Russian Federation.

In recent years, the trend towards centralization of tax revenues has become clear. Revenue sources are being consolidated across levels of government more and more in favor of the Center, i.e. A model is being implemented: the total income from the Center is split into the budgets of the levels of government.

In its classical form, the single-pot method was used in the USSR: regional and local authorities did not have any significant budgetary independence. Territorial budgets were approved by higher-level authorities and management, which ensured their balance with the provision of subsidies to cover the “planned deficit.”

After the collapse of the USSR, a period of liberal euphoria began in inter-budgetary relations. However, the very first attempts to introduce “democratic” inter-budgetary relations led to an increase in the deficit of regional budgets, counter financial flows, differentiation of the subjects of the Russian Federation in the level of tax revenues.

And again the problem of fair distribution of funds between regions and local budgets arose, which requires their concentration in the federal budget, in the absence of differentiation of tax rates.

In addition, there is no reason to believe that the regions perform government functions better than the Center. Quite the contrary, the obvious inefficiency of spending funds by the regions forced the Center to increase the share of funds concentrated in the federal budget. At the same time, the corresponding financial powers have also been raised to the federal level.

The centralization of funds in the federal budget does not significantly affect the recipient entities; they are accustomed to subsidies in any case. In subsidized regions, budgets are only sufficient to pay wages. Funding for programs and projects is reduced to a minimum.

Donor regions may see their tax revenues decline, and in order to maintain the same level of funding, they will have to find reserves. They are available. The main reserve is the development of production and local business. This is difficult, but otherwise it is impossible to strengthen the tax base.

Centralization of tax revenues, of course, also has negative sides. The limited fiscal powers of the constituent entities of the Russian Federation and local self-government make it possible to shift responsibility for balancing budgets and the state of the social sphere to the Center, since financial assistance to the regions is intended mainly to meet social needs. Governors do not have enough money, and tense situations constantly arise. Dependence on the center deprives them of the ability to maneuver, forces them to act like a fire brigade, and reduces their political weight.

For many years, the Government of the Russian Federation has been searching for more advanced forms of interbudgetary relations. Currently, the goal is to ensure that financial obligations are provided from one budget or in the form of targeted financial assistance. This requires streamlining both the spending and tax powers of the regions: reducing the scope of joint financing, a clear delineation of functions between levels of government, and increasing the share of their own taxes in revenues.

In order to have sufficient autonomy in the financial and economic sphere and be fully responsible for spending powers, each budget level must have its own taxes. It is advisable to assign to local budgets taxes collected from a non-mobile base, as well as revenues that directly depend on the welfare of payers in a given territory (property tax, sales tax, utility bills), to regional budgets - taxes on personal income, for use common natural resources; for the federal budget - indirect taxes on profits, on users of natural resources.

With any model of interbudgetary relations, on the one hand, unproductive non-targeted expenses should not be covered and thus dependency and individualization of standards should not be encouraged, and on the other hand, existing differences between regions in terms of the formation of the tax base cannot be ignored. Never will all taxes remain where they are paid or be concentrated in one central fund for redistribution; This is neither economically nor technically possible, therefore there must always be a redistribution mechanism so that both expenditure and revenue powers can be implemented in the interests of optimizing the financial balance of the territories.

To equalize budgetary security and the population's access to basic social guarantees, various forms of financial assistance to lower-level budgets are needed, which have not only an equalizing, but also a stimulating value.

Thus, the federal budget provides the regions with funds for:

• road construction;
• emergency financial assistance (natural disasters, emergencies, etc.);
• help from ZATO;
• loans for cash gaps;
• prolongation of debt of constituent entities of the Russian Federation:
• settlements with constituent entities of the Russian Federation for housing and social facilities and other purposes.

Sources of funds for financial assistance are concentrated in budget funds:

• financial support for constituent entities of the Russian Federation (FFPR);
• regional development (RDD);
• reforming regional finances (FRRF);
• co-financing of social expenses;
• compensation.

FFPR - transfer form 1 The concept of “transfer” is not defined in regulations. In the budget classification, transfers are reflected in the sections “Subsidies and current transfers”. "Capital transfers". "Interbudgetary transfers".. The funds of the fund are intended for subsidies to equalize the levels of budgetary provision of the constituent entities of the Russian Federation.

Transfer calculations are based on gross regional product, tax potential, and social standards.

Gross regional product (GRP)- the sum of newly created value and net taxes on products (the difference between output and intermediate consumption), i.e. regional analogue of GDP. Territorial differences in GRP per capita are quite stable, so it can be used as a factor in the tax potential of the region.

Tax potential depends on the volume and structure of GRP. It is compared with budget expenditures necessary for the provision of budget services for socially significant elements (housing and communal services, education, health care, culture, transport, social protection, management). The cost of a conventional unit of budget services is determined. It is adjusted taking into account the settlement of the territory (development factor), accounts payable of the region and other factors.

Budgetary security is calculated based on a comparison of indices of budget expenditures and tax potential 1 When determining the estimated budgetary capacity, the use of actual income and expenses for the reporting period and projected indicators of income and expenses is not allowed, which can hardly be considered justified.. The regions are guaranteed a certain level of budgetary security in the calculations.

Regions, applying the same principles, equalize the budgetary provision of municipalities.

The transfer is directly related to tax collection in the region: the higher it is, the lower the transfer amount; The smaller the share of own income in the consolidated budget, the greater its dependence on the receipt of funds from the federal budget and the greater the impact of the reduction in transfers on the deterioration of the financial security of the region. Taking into account the tax potential when distributing transfers forces regions to be more restrained in providing tax benefits (the transfer may decrease by the amount of benefits).

Many vertically integrated and other companies, operating in the regions and using their infrastructure, pay taxes in Moscow, offshore zones and other favorable places. Without changing the procedure for registering legal entities, it is difficult to ensure the financial self-sufficiency of each region.

Investment support for regional development is provided from the RDF, which is a set of relevant parts of federal programs, regional programs, industry financing programs and projects and other capital investments. The Fund consolidates federal budget expenditures, which are aimed at creating the infrastructure necessary for the implementation of social guarantees established by Russian legislation. The distribution of funds is carried out taking into account objectively determined differences in the budgetary needs of the regions in the main areas of budget expenditures. The number of social infrastructure facilities that should exist on the territory of each subject of the Russian Federation is determined,

The executive authorities of the constituent entities of the Russian Federation, applying to receive funds from the Federal Reserve, enter into an agreement with the Ministry of Economic Development and Trade of the Russian Federation on an investment plan for the development of the social infrastructure of the region. In this case, the share of the federal budget cannot exceed 50% of the total funding of the project (program).

In order to improve the budgets of the constituent entities of the Russian Federation, the Regional Finance Reform Fund (FRRF) was created. The fund's sources of funds are loans from international financial organizations, as well as other funds. Regions that are actively pursuing economic and financial reforms, non-subsidized and low-subsidized, have the right to receive FRRF funds (on a repayable basis).

Interbudgetary relations are controlled by the relevant federal and regional authorities. A maximum level of deficit and debt of territorial budgets is established in order to guarantee the fulfillment of their obligations to the population, creditors, and budgetary organizations.

Those receiving financial assistance to equalize budgetary security are limited in terms of spending funds. When a subject of the Russian Federation receives financial assistance in the amount of more than 50% of the expenses of its consolidated budget, an audit is mandatory.

In the constituent entities of the Russian Federation, a temporary financial administration may be introduced for a period of up to one year at the request of the Government of the Russian Federation by decision of the Supreme Arbitration Court of the Russian Federation. The basis for taking such a measure is the overdue debt of a constituent entity of the Russian Federation of more than 30% of its own budget revenues in the reporting year, if it arose as a result of decisions, actions or inactions of the government authority of the constituent entity of the Russian Federation.

In order to restore solvency, the provisional administration is taking measures to restructure overdue debt.

Principles of delimitation of income and expenses between budgets of different levels. But at the same time, there remains too little opportunity to take into account the actual needs of individual territories of the federal subjects and municipalities and ensure their interest in expanding their own income potential. Decentralization of the budget system, which reduces the concentration of budget revenues in the center, accordingly reduces the volume of redistributed funds, but almost never completely eliminates the need to use mechanisms...

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PAGE 2

LECTURE 11

Number of hours 2

TOPIC: INTERBUDGETARY RELATIONS

1. General characteristics of interbudgetary relations.
2. Principles of delimitation of income and expenses between budgets of different levels.
3. Criteria for assessing interbudgetary relations.

1. General characteristics of interbudgetary relations.

Interbudgetary relations are relations between government bodies of the Russian Federation, government bodies of constituent entities of the Russian Federation and local governments related to the formation and execution of relevant budgets.

The ultimate goal of interbudgetary relations is to ensure that every person and citizen of the country is guaranteed minimum social services and a decent standard of living.

A centralized budget system is characterized by a high degree of concentration of tax and other revenues in the federal budget, the funds of which, during the so-called interbudgetary equalization, are redistributed between lower budgets by providing them with various subsidies. Such a system makes it possible to mobilize and purposefully use significant budget funds, primarily in the national interests. But at the same time, there remains too little opportunity to take into account the actual needs of individual territories (federal subjects and municipalities) and ensure their interest in expanding their own income potential.

Decentralization of the budget system, which reduces the concentration of budget revenues in the “center”, correspondingly reduces the volume of redistributed funds, but almost never completely eliminates the need to use inter-budgetary equalization mechanisms. This is due to at least two main motives. Firstly, so far it has not been possible to ensure in practice that the amount of tax and other budget revenues fully corresponds to the volume of expenditure obligations of the relevant authorities; the lack of funds is usually forced to compensate for budget subsidies. Secondly, there is the task of influencing the central government on the formation of budgetary and other policies of territorial bodies based on national priorities.

The imbalance of budgets “vertically” is determined by the fact that the volume of functions assigned to sub-federal authorities, as a rule, exceeds their ability to finance necessary expenses from assigned revenue sources.

The imbalance of budgets “horizontally” is associated with the uneven economic development of territories, accordingly, the differentiation of their revenue (tax) potential (differences in the revenue opportunities of large and small cities, urbanized and rural areas). These differences arise due to reasons beyond the control of the territories themselves: lack of natural resources, unfavorable demographic structure of the population.

The problem of legal regulation of interbudgetary relations in the Russian Federation has again become particularly relevant in connection with the entry into force on January 1, 2005 of a new edition of Chapter. 16 of the Budget Code of the Russian Federation (hereinafter referred to as the Budget Code of the Russian Federation). Not only the title of the chapter has changed. 16, but also content. If earlier Ch. 16 was called “Interbudgetary relations”, then in the new current edition it is called “Interbudgetary transfers”, and the term “interbudgetary relations” is used in the Budget Code of the Russian Federation only once, in its Art. 6 defines the concept of interbudgetary relations. The current version of Ch. 16 is devoted directly to interbudgetary transfers. It defines:

1) forms of interbudgetary transfers provided from the federal, regional and local budgets;

2) conditions for the provision of interbudgetary transfers;

3) general provisions on funds formed as part of the federal, regional and local budgets, from which interbudgetary transfers are provided.

Transfers are allocated to territorial budgets from special funds created in the federal, regional and district budgets (financial support funds for territories, territorial development funds, etc.).

Interbudgetary relations are based on the principles:

Distribution and consolidation of budget expenditures at certain levels of the budget system of the Russian Federation;

Delineation (consolidation) on a permanent basis and distribution according to temporary standards of regulatory income by levels of the budget system of the Russian Federation;

Equality of budgetary rights of the constituent entities of the Russian Federation, equality of budgetary rights of municipalities;

Alignment of the levels of minimum budgetary provision of the constituent entities of the Russian Federation, municipalities;

Equality of all budgets of the Russian Federation in relations with the federal budget, equality of local budgets in relations with the budgets of the constituent entities of the Russian Federation.

In accordance with these principles, certain types of budget revenues and expenses can be transferred from the federal budget to the budgets of the constituent entities of the Russian Federation and from the budgets of the constituent entities of the Russian Federation to local budgets.

The differentiation of income and expenses between the levels of the budget system of the Russian Federation implies two points. Firstly, each level of the budget system - federal, regional or local budget - has equal rights to assign to it part or all of the income determined by budget legislation. Secondly, government bodies of the Russian Federation, government bodies of constituent entities of the Russian Federation and local governments have the right to independently determine the amount of expenses and directions for spending funds from the federal, regional and local budgets, respectively.

The process of distributing expenses and income between the links of the budget system is based on the principle of equality of the budgets of the constituent entities of the Russian Federation in relations with the federal budget and local budgets with regional budgets, which involves the use of a unified methodology for calculating standards for financial costs for the provision of state and municipal services, standards for calculating financial assistance territorial budgets (interbudgetary transfers), as well as a unified procedure for paying federal and regional taxes.

The principle of separating income and expenses between the levels of the budget system of the Russian Federation is divided into two interrelated principles. Firstly, each level of the budget system - federal, regional or local budget - has equal rights to assign to it part or all of the income determined by budget legislation. Secondly, government bodies of the Russian Federation, government bodies of constituent entities of the Russian Federation and local governments have the right to independently determine the amount of expenses and directions for spending funds from the federal, regional and local budgets, respectively.

2 Principles for distinguishing income and expenses between budgets of different levels

One of the main problems of inter-budgetary relations is the search for the optimal balance of income coming to regional budgets in the form of taxes and in the form of financial assistance. This problem, in principle, does not have a clear solution. On the one hand, increasing the share of tax revenues in the revenue side of regional budgets is supported by the fact that, unlike financial assistance, the amount of which does not depend in any way on local authorities, the larger the tax base of the corresponding territory, the greater the tax revenues to the regional budget. Consequently, assigning tax revenues to regional budgets has the advantage over subsidies that it stimulates the own tax efforts of regional and local authorities.

The basic condition for delimiting income and expenses between levels of the budget system is the delimitation of powers between authorities at different levels and local governments.

The conferment of powers can be carried out in 2 forms: transfer and delegation of powers. Transfer of powers is a method of regulating the powers of a state body, in which any power of a state body of the Russian Federation (subject of the Russian Federation) is excluded from its competence and included in the competence of the state body of a subject of the Russian Federation (local government body). In contrast to the transfer, delegation of powers involves the provision by a state body of the Russian Federation (subject of the Russian Federation) of the right to resolve any issue belonging to it to the state body of the subject of the Russian Federation (local government body) for one time, for a certain period or indefinitely.

The vesting of constituent entities of the Russian Federation with powers at the federal level is determined by the following:

1. Carried out only in accordance with federal law, the law of a constituent entity of the Russian Federation, a contract or agreement concluded between state authorities of the Russian Federation and state authorities of constituent entities of the Russian Federation and local governments;

2. Must be confirmed by the transfer of material and financial resources necessary for their implementation;

3. It assumes control of the Russian Federation over the implementation of transferred (delegated) powers;

4. Transfer (delegation) of powers only to executive authorities.

Basics of delimitation of expenditure powers and revenue sources.

When assessing the effectiveness of interbudgetary relations, it is important to proceed, first of all, from the degree to which their main goal is achieved. This is the creation of initial opportunities for reducing differences in the budgetary provision of public legal territorial entities and the formation of balanced budgets by regional and local authorities, the implementation of the powers entrusted to them, the provision of equal conditions to the population throughout the country in receiving budgetary services in a volume and quality not lower than minimum required level. If we proceed from the fact that their scope includes relations between government bodies of predominantly different levels regarding the delimitation of areas of jurisdiction and corresponding expenditure obligations, as well as, to the maximum possible extent, adequate revenue sources for them, then the justified construction of this block of interbudgetary relations is a basic condition for effective their functioning. Achieving this largely depends on the extent to which such a distinction corresponds to the scientifically based criteria (principles) underlying it. The Decree of the Government of the Russian Federation “On the Program for the Development of Budgetary Federalism in the Russian Federation” states that the Budget Code of the Russian Federation should establish a clear and stable division of spending powers between government bodies at different levels in accordance with the criteria:

· subsidiarity (maximum proximity of government bodies exercising spending powers to consumers of relevant budget services);

· territorial compliance (maximum coincidence of the territorial jurisdiction of the authority exercising spending powers and the area of ​​consumption of the corresponding budget services);

· external effects (the higher the interest of society as a whole in the implementation of spending powers, the, ceteris paribus, they should be assigned to a higher level of government);

· the effect of territorial differentiation (the higher the regional/local differences in the production and consumption of budget services, the lower levels of the budget system they should be provided);

· economies of scale (concentration of budget expenditures contributes to budget savings).

For expenditure powers, such criteria include the principle of territorial correspondence. Thus, budget services in the field of education and health care can be provided at different levels of government and the budget system.

Another important principle for the delimitation of spending powers is the focus on being as close as possible to the level of those territorial entities in the interests of whose population the budget service is provided. This principle is called the principle of subsidiarity. Assigning to municipal districts and urban districts the authority to “organize the provision of public and free primary general, basic general, secondary (complete) general education in basic general education programs” meets the principle of subsidiarity. In this case, the budget service is assigned to the corresponding local level of government, and the most significant part of the financing of this service is provided through subventions to local budgets from regional budgets.

At the same time, based on the principle of “economy of scale”, adjustments can be made to the division of jurisdiction and expenditure powers, made on the basis of the above principles through some centralization of individual powers, if at a higher level the implementation of relevant budget services is ensured more efficiently, including savings budget funds. As for the criteria for delimiting revenue sources between levels of the budget system, in addition to the principles reflected in the Program for the Development of Budgetary Federalism, the following principle also seems important: given the wide distribution of the tax base of “large” taxes throughout the country, such taxes can be joint, directed to the appropriate shares in different levels of the budget system, both on a permanent basis and on a temporary basis. The most important condition for increasing the efficiency of interbudgetary relations should be the provision that financial support for expenditure powers, the execution of which is entrusted to regional and local authorities, should be carried out, first of all, on the principle of self-reliance and only in the missing part for objective reasons - for account for the redistribution of funds from budgets of another level.

The main methods of delimiting income between levels of the budget system of the Russian Federation include:

1. division of types of taxes between levels of government;

2. quotas on tax revenues within a single tax rate, allocation of a share (the rate or volume of tax revenues may be subject to quotas).

When distinguishing specific types of taxes and revenue sources between budgets of different levels, the Program for the Development of Fiscal Federalism proposes to take into account the following criteria:

· stability;

· economic efficiency;

· territorial mobility of the tax base;

· uniform distribution of the tax base;

· social justice;

· budgetary responsibility.

The mechanism for redistributing funds between budgets in the Russian practice of interbudgetary relations is represented by interbudgetary transfers, which mean funds from one budget of the budget system of the Russian Federation transferred to another budget of the budget system of the Russian Federation. Interbudgetary transfers can be carried out in the form of grants, subventions, subsidies and budget loans.

Subsidies - budget funds provided to budgets of other levels on a free and irrevocable basis to finance current expenses;

Subventions are provided only from the Federal Compensation Fund, regional compensation funds and local budgets. These are budget funds provided to the budget of another level of the budget system on a free and irrevocable basis, but to finance targeted expenses.

Subsidies are also budget funds provided to budgets of other levels, legal entities or individuals, on a gratuitous, non-repayable basis and on a shared basis, to finance targeted expenses.

Budget loan - budget funds provided to the budget of one or another level and to legal entities on a repayable (for a period of up to one year) and reimbursable basis to finance current and capital expenses.

3. Criteria for assessing interbudgetary relations

The approach to assessing the effectiveness of interbudgetary relations is based on the fact that the system for organizing the financing of municipalities must solve three interrelated problems.

1. Ensure the financial autonomy of municipalities, which creates the conditions for their independent activity as a level of public authority, makes it possible to choose the most effective ways to resolve issues of local importance, creates the prerequisites for comprehensive socio-economic development, allows for the creation of incentives to increase income and optimize local budget expenditures .

2. Use mechanisms to equalize the financial conditions for the activities of municipalities, which allows creating prerequisites for the implementation of social justice in ensuring citizens’ access to municipal services, and creating incentives to optimize municipal expenditures.

3. Ensure the transfer to the municipal level of resources sufficient to resolve issues of local importance, taking into account objective differences in the needs of the population and the characteristics of the socio-economic development of the territories, without which it is impossible to most fully satisfy the demand of citizens for municipal budget services.

We can propose the following general approach to assessing the effectiveness of interbudgetary relations in the constituent entities of the Federation:

1) the assessment covers all three of the above components, which determine the financial conditions for the effective implementation of municipal reform;

2) for each of the components, both the procedures enshrined in the legal regulation of interbudgetary relations at the regional level, and the results of using the instruments of interbudgetary relations, reflected in the quantitative indicators proposed below, are considered;

3) for each of the components, two main parameters are assessed: compliance of the regulation of interbudgetary relations in a constituent entity of the Federation with the requirements of federal legislation and the degree of use of the tools provided by federal budget legislation for the most effective implementation of municipal reform.

In this work, the financial autonomy of municipalities is understood as the ability of local governments to receive financial resources from taxation of the local economy and independently use these resources to meet the needs of local residents for relevant benefits.

The most common and long-used indicator in this area is the share of income and expenses of municipal budgets, respectively, in the income and expenses of the country’s consolidated budget.

When assessing the financial autonomy of municipalities in this area, it is necessary to determine:

How limited is the financial independence of local governments when resolving issues of local importance;

What are the priorities of a subject of the Federation when allocating interbudgetary transfers? Is it primarily focused on strengthening the financial autonomy of municipalities or seeks to influence the direction of spending local budget funds.

Accordingly, the following indicators can be used in this area:

1) the share of tax revenues, non-tax revenues and subsidies in municipal budget revenues (without subventions);

2) the ratio of unconditional financial assistance (subsidies for equalizing budgetary security, subsidies for balancing and other interbudgetary transfers in the form of subsidies) and conditional financial assistance (subsidies for co-financing expenses, other interbudgetary transfers with a specific purpose) in the total volume of interbudgetary transfers to municipal budgets.

In this case, the basic indicator for assessment is the first indicator, for which it is proposed to use the same algorithm as in relation to the fixation of tax revenues. The proposed indicator is analyzed over several years, as well as in comparison with the national average indicator values.

In assessing the effectiveness of interbudgetary relations in terms of the sufficiency of financial resources to resolve issues of local importance, it is necessary to answer the following questions:

1) how financial resources are distributed between regional and local budgets;

2) whether the financial guarantees established for municipalities are implemented in practice, if their presence is revealed during the analysis of regional legislation;

3) to what extent funds intended for resolving issues of local importance are diverted to the execution of transferred state powers;

4) whether local governments allow the appearance of overdue accounts payable during the financial year (the presence of accounts payable may indicate not only the low financial discipline of local governments, but also the insufficiency of their financial resources).

To assess the first direction, it is proposed to use the following indicators:

Share of revenues of the total municipal budget in the revenues of the consolidated regional budget (without and taking into account subventions);

The share of income of the total municipal budget of settlements, municipal districts and urban districts in the income of the consolidated regional budget (without and taking into account subventions).

The proposed indicators, taking into account subventions, reflect the distribution of the entire volume of funds between the regional and municipal levels; indicators without taking into account subventions make it possible to more clearly assess what share of funds is allocated to resolve issues of local importance.

Indicators characterizing the share of revenues of the total municipal budget in the revenues of the consolidated regional budget are assessed:

Based on planned and actual data from budget statistics;

Dynamics over several years;

Compared to the national average.

The low degree of efficiency of the system of interbudgetary relations is evidenced by the following factors:

The actual share of the total municipal budget revenues in the consolidated regional budget revenues without subventions is less than the national average;

The actual share of the total municipal budget revenues in the consolidated regional budget revenues without subventions has tended to decrease over the past three years (especially if the value of this indicator is below the national average);

The actual share of the total municipal budget revenues in the consolidated regional budget revenues without subventions is below the national average, and the actual share of the aggregate municipal budget revenues in the consolidated regional budget revenues, taking into account subventions, is higher than the national average (which means an increasing burden on local governments with state powers while limiting funds for solving local issues);

The actual value of the share of revenues of the aggregate municipal budget in the revenues of the consolidated regional budget without subventions is significantly less than planned, which means that a fair distribution of additional revenues received during budget execution is not ensured between the regional and municipal levels, or that a disproportionately large share of the actual budget is transferred to local budgets. shortfall in income compared to plan.

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5.1. Concept and principles of interbudgetary relations

Interbudgetary relations — these are the relations between government bodies of the Russian Federation, government bodies of the constituent entities of the Russian Federation and local government bodies regarding:

1) differentiation of expenses and income on an ongoing basis between the levels of the budget system;

2) distribution between budgets of different levels of regulatory taxes according to temporary standards;

3) redistribution of funds from budgets of one level to another, as well as between budgets of the same level in different forms.

The goal of inter-budgetary relations is to create the initial conditions for balancing budgets at each level, taking into account the tasks and functions assigned to them, while observing the minimum state social standards throughout the country, based on the tax potential available in the relevant territories.

The nature of interbudgetary relations is based on fiscal federalism. Fiscal federalism is a system of principles for building inter-budgetary relations, which allows, in the conditions of independence of each budget, to combine the interests of the Federation with the interests of each of its subjects and local governments.

Principles of interbudgetary relations:

1) independence of budgets of different levels. Budget independence in this case means:

• assigning each level of government its own revenue sources and the right to independently determine the direction of spending budget funds within the framework of current legislation;
• the inadmissibility of withdrawing additionally received income to higher budgets;
• compensation of expenses arising as a result of decisions made by higher authorities of state power and administration, budgets;

2) differentiation of expenditure obligations between government bodies and management at various levels;

3) compliance of the volume of expenditure obligations assigned to each level of government and management with revenue powers;

4) the presence of a formalized mechanism for correcting the imbalance between expenditure obligations and revenue powers of each level of government;

5) the presence of special procedures for preventing and resolving conflicts between different levels of government and management bodies.

5.2. Revenue powers and expenditure obligations

One of the factors that seriously constrains the growth of the efficiency of interbudgetary relations is the persistent disproportions between the volume of budget expenditure obligations and revenue sources assigned to the constituent entities of the Federation.

In 1994, in accordance with Decree of the President of the Russian Federation No. 2268, a new form of redistribution of funds between federal budgets was introduced into the mechanism of budgetary federalism: the transfer of funds from the federal budget to regional budgets is carried out by forming a Fund for Financial Support of Regions and calculating the amount of allocated funds based on a specially developed formula . This method also began to be used in relations between regional and local budgets. Its use contributed to the objectification of the interbudgetary distribution of funds.

In the process of reforming interbudgetary relations, which has been going on throughout the last decade, 2005 became a milestone, when for the first time the budget began to be formed on a fundamentally new basis - the legislative delimitation of financial and budgetary powers between all levels of the budget vertical. However, the practice of budget execution in the past and current year shows that, unfortunately, many regional and local budgets do not have enough funds to fulfill their spending powers. Thus, in 2005, this necessitated a significant increase in subsidies from the federal budget to support measures to ensure the balance of the budgets of the constituent entities of the Russian Federation (up to 52 billion rubles). In 2007, the volume of subsidies provided for the budgets of the constituent entities of the Russian Federation to support measures to ensure balanced budgets is proposed in the amount of 34.64 billion rubles, which is almost 39% higher than the level of 2006.

The problem of delimiting revenue powers between levels of the budget system is usually considered in the context of the following aspects:

• the level of government at which the decision to introduce a tax is made;
• the level of the budget system in which the funds collected as a result of the introduction of the tax are received;
• level of the budget system that carries out administration.

Most of the functions of administering taxes, establishing tax bases, tax rates or marginal tax rates are also assigned to the central authorities.

Tax revenues should be distributed between budgets of various levels in accordance with the expenditure obligations assigned to them and the responsibility of the sub-federal authorities for their implementation.

The list of federal, regional and local taxes of the Russian Federation is established by the first part of the Tax Code of the Russian Federation. In the Russian Federation, the model of interaction between levels of government in the field of delimitation of tax revenues is mainly practiced, based on the division of tax revenues between levels of the budget system. This means that revenues from a tax introduced at any level of the budget system can also flow into the budgets of other levels. For example, in 2003, 50% of the revenue from the excise tax on raw ethyl alcohol (which relates to federal taxes and fees) went to the federal budget, and 50% to the budgets of the constituent entities of the Russian Federation. At the same time, 50% of the revenue from land tax, which is local, went to the budgets of the constituent entities of the Russian Federation (with the exception of Moscow and St. Petersburg), and 50% to the budgets of municipalities.

A model based on the division of tax revenues between levels of the budget system is practiced not only in Russia, but also in a number of developed countries, among which Germany can be distinguished. The main advantage of such a system of relationships between the levels of the budget system is the simplicity of regulating the proportions between the income of the federal and subfederal budgets in cases where the relationship between revenue powers and expenditure obligations changes. However, when implemented in the Russian Federation, this model led to a number of negative consequences. Firstly, regional authorities often treat their share of federal taxes as “other people’s” money and do not manage them responsibly enough. Secondly, frequent changes in the proportions of tax division between levels of the budget system lead to a disinterest in regional authorities in increasing their own tax base and to the ineffectiveness of developing long-term development programs.

The division of expenditure obligations between levels of the budget system should be based on the following principles:

• macroeconomic efficiency. This principle means the distribution of expenditure obligations taking into account the effects of scale, localization and erosion. All expenses of a redistributive nature, within the framework of this criterion, must be transferred to the highest possible level of government in order to prevent social conflicts;
• zone use criterion. It implies bringing expenses as close as possible to consumers of the relevant benefits;
• the principle of uniformity of expenses across the territory. It means the need to spend funds from budgets at higher levels if they are evenly distributed throughout the country.

In accordance with these principles, expenses between levels of the budget system should be distributed as follows.

The legal basis for the delimitation of powers, including expenditure ones, in Russia is the Constitution of the Russian Federation, the Budget Code of the Russian Federation, and the federal law “On the general principles of organizing local self-government in the Russian Federation.” The Constitution of the Russian Federation defines the jurisdiction of the federal center, the joint jurisdiction of the Russian Federation and the constituent entities of the Russian Federation, as well as the jurisdiction of the constituent entities of the Russian Federation, which have full state power outside the jurisdiction of the Russian Federation and the joint jurisdiction of the Russian Federation and the constituent entities of the Russian Federation.

Interbudgetary relations became especially aggravated in 1996-1997, which was reflected in a large number of surrogate monetary and non-monetary forms of budget execution; the distribution of financial resources between the levels of the budget system vertically and horizontally acquired a subjective nature, massive delays in financing the costs of paying wages, etc., acquired a social nature.

The main problem characteristic of the Russian Federation in the field of expenditure powers was their unclear delimitation in legislation and the attribution of a significant part of expenses to the sphere of joint jurisdiction, which led to a blurring of responsibility between various levels of government and local self-government. The unclear delimitation of powers and the presence of a large volume of obligations imposed by higher levels of government on subfederal budgets entails a disinterest in regional authorities in pursuing their own economic policies aimed at economic and social development. Obligations imposed by higher levels of government on subfederal budgets that are not backed by sources of funding are called unfunded federal mandates. An example of an unfunded federal mandate is the decision of the federal center to increase wages for public sector employees, the implementation of which is the responsibility of the subfederal authorities.

Requirements for providing benefits and subsidies to certain categories of citizens are contained in more than 120 federal legislative acts. Federal laws oblige local authorities to pay for 37 types of benefits from their budgets. The existence of unfunded federal mandates is a direct violation of the principle of matching the volume of expenditure obligations assigned to each level of government and management with revenue powers.

In this regard, the Government of the Russian Federation developed a Concept for reforming interbudgetary relations. Its main task is to create a new mechanism for financial support of constituent entities of the Russian Federation. In 1999, a new methodology for distributing transfers from the Financial Support Fund for Regions (FFSR) was adopted; in 2001, the reform of the FFSR was completed with the methodology and procedure for distributing the bulk of financial assistance to the constituent entities of the Russian Federation being consolidated at the federal level. The basis for calculating financial assistance to the constituent entities of the Russian Federation from the federal budget is the standards of financial costs for the provision of public services, the standards of minimum budgetary provision. In this regard, the Budget Code introduced such concepts as minimum state standards (state services, the provision of which to citizens on a free and irrevocable basis through financing from the budgets of all levels of the budget system of the Russian Federation and the budgets of state extra-budgetary funds is guaranteed by the state at a certain minimum level throughout territory of the country) and minimum budgetary provision (the minimum acceptable cost of state or municipal services in monetary terms, which is provided by state authorities or local self-government per capita at the expense of the relevant budgets). To establish standards and determine the level of budgetary security, it is necessary to develop standards for financial costs for the provision of services and standards for minimum budgetary security. These standards are determined on the basis of a unified methodology that takes into account the socio-economic, geographical, climatic and other features of the subject of the Federation that affect the level of these standards.

It should be noted that the formation of interbudgetary relations in 2007 took into account changes in tax and budget legislation introduced on January 1, 2007. The main ones include:

• transfer to the budgets of the constituent entities of the Russian Federation of the federal part of the mineral extraction tax in relation to extracted natural diamonds and one-time payments for the use of subsoil (bonuses) for natural diamond deposits.

5.3. Interbudgetary transfers

The section “Interbudgetary transfers” accounts for more than a third of all federal budget expenditures for 2007 - 33.7%. The total expenses for this section in the draft budget amount to 777.2 billion rubles, which is 46.8% more than in the 2006 budget.

Redistribution volumes have increased significantly in recent years. If in 1999 gratuitous transfers to the regions amounted to 9% of federal budget expenditures, then in 2001 - more than 18%, and in 2005 - about a third. However, it should be borne in mind that such a significant share of funds redistributed through the federal budget between different levels of the budget system is largely due to the fact that in recent years this section has included many items of expenditure that were previously allocated to other sections of the federal budget.

In addition, the budget, starting from 2005, is based on a new system of delimitation of spending powers. At the same time, a significant part of the powers assigned to the federal center is delegated to the regional level and is financed from the federal budget, which are also included in “interbudgetary transfers.”

The main type of financial assistance to budgets of other levels is Fund for Financial Support of Regions (FFSR), created in 1994. Until 2001, the FFPR accounted for up to 70% of all expenses for providing financial assistance to regional budgets, now it is about 43%. The decrease in amounts distributed to the regions through this fund is due to the creation and consolidation of a number of other funds for subsidizing the regions. The total volume of the FFPR is planned in the draft budget for 2007 in the amount of 260.42 billion rubles, which is 14% more than approved in the budget law for 2006.

The main goal of this Fund is to equalize the budgetary provision of the constituent entities of the Russian Federation. The FFPR allocates subsidies to the constituent entities of the Russian Federation to equalize the level of budgetary security, subsidies for state financial support for the purchase and delivery of oil, petroleum products, fuel and food products to the regions of the Far North and equivalent areas, subventions to compensate electricity tariffs for the territories of the Far East and the Arkhangelsk region .

The methodology for calculating the volume of FFPR subsidies is based on the indicator of the level of estimated budgetary provision of the region, which depends on the tax potential and expenditure needs of the region, calculated using special methods, relative to the Russian average. In 2007, changes were made to this methodology for calculating the tax potential index, aimed at ensuring that for regions that have achieved higher indicators of socio-economic development and were able to increase their tax potential above the Russian average level, the volume of federal subsidies is not reduced. This is expected to achieve the goal of stimulating regions to develop their own tax base.

Another instrument of interbudgetary regulation is Federal Fund for Regional Development (FFRD). The fund's funds are used to equalize the provision of regions with engineering and social infrastructure and to finance federal regional development programs.

Next year, funds will be allocated to regions in the form of subsidies to co-finance the development of public infrastructure of regional and municipal importance. In addition, in connection with the ongoing local government reform, regions may receive additional federal funds to create and support regional municipal development funds.

The criterion for receiving funds from their FFRR are formalized principles, taking into account the level of co-financing of expenses, determined on the basis of the budgetary security of the regions with the right of the constituent entities of the Russian Federation to independently determine specific areas for the use of funds. If, after the distribution of subsidies from the Financial Support Fund, the regional indicator of public infrastructure provision does not exceed the Russian average level by more than 10% or below this level, then the subject of the Federation will receive subsidies from the Regional Development Fund. Moreover, only recipients can receive assistance through this fund. Donor regions, even if the level of development of public infrastructure in them does not meet average Russian standards, do not receive subsidies from the FFRD. Thus, in 2007, 69 regions will receive subsidies from this fund (55 in 2006).

An important tool for supporting regional budgets is Federal Fund for Co-financing Social Expenditures. The volume of the Fund for 2007 will be about 33.5 billion rubles, which is 27.8% higher than the level of the current year. The main goal of the Co-financing Fund is to support the budgets of the constituent entities of the Federation in the form of partial reimbursement of regional expenses for solving priority, socially significant problems. Subsidies from this fund are distributed among all constituent entities of the Russian Federation for shared financing (partial reimbursement) of priority socially significant expenses (primarily for education, healthcare, culture, social security, social assistance to the population).

Thus, in 2007, 8.24 billion rubles were allocated to provide subsidies to low-income citizens to pay for housing and communal services. At the same time, the level of co-financing of these expenses from the federal budget will be 15% of the expected expenditure obligations of the constituent entities of the Russian Federation. It is also planned to allocate funds for the implementation of social support measures for rehabilitated persons and persons affected by political repression, home front workers, citizens with children, and labor veterans.

A significant part of interbudgetary transfers is Federal Compensation Fund (FFK), the volume of which in 2007 will amount to a significant amount - about 153.9 billion rubles, which is more than 2 times the size of the Fund in 2006.

The funds from this fund are allocated in the form of targeted subventions to finance certain powers that are federal, but are delegated for execution to the regional level of government. Funds from this fund are transferred to all subjects of the Federation without exception, regardless of their level of budgetary support, in proportion to the size of the corresponding categories of the population. For each of the powers, funds are allocated in a separate line, and recently the list of these powers has been regularly changing in connection with the ongoing reform. A number of other items of expenditure under the Compensation Fund, related to the support of a number of regions and municipalities, have been financed for several years now.

Thus, within the framework of this fund, in the current 2006 budget, subventions were allocated for the first time for the implementation of powers in the field of regulation of water relations, protection and use of wildlife classified as objects of hunting, management and use of forests. The same areas of financing remain in the draft budget for 2007.

In 2007, this fund included compensation to increase the salary of employees and wages of employees of territorial fire service units, as well as employees of territorial public security police units, supported by funds from the budgets of the constituent entities of the Russian Federation and local budgets: 6.9 and RUB 8.2 billion This will help equalize pay and wages in these organizations at the federal and territorial levels.

The main task Federal Fund for the Reform of Regional and Municipal Finance is to encourage regions that work most effectively with their finances, with their budget. The draft budget for 2007 provides for the selection of 10 constituent entities of the Russian Federation and municipalities for the provision of subsidies based on the results of an assessment of regional and municipal finance reform programs. Regional Finance Reform Fund is formed from a loan from the International Bank for Reconstruction and Development (IBRD).

In addition to special funds that have a specific focus, in the “Interbudgetary transfers” section, various types of subsidies and subventions provided to constituent entities of the Russian Federation to finance socially significant expenses, as well as for the implementation of national projects, are highlighted as a separate line.

Federal budget expenditures allocated for the implementation are also directly related to the inter-budgetary sphere. Federal Targeted Investment Program, which includes financing of Federal Target Programs (FTP), some of which directly relate to the regions. The 2007 budget ends funding for a number of federal target programs for regional development. At the same time, next year the list of federal targeted programs includes two new regional programs with significant amounts of federal funding: “Development of Sochi as a mountain climatic resort for 2006-2014.” and “Socio-economic development of the Kuril Islands for 2007-2015.” In addition, in the 2007 budget, funding from the federal budget of the program “Restoration of the economic and social sphere of the Chechen Republic for 2002 and subsequent years” will double (from 6 to almost 12 billion rubles).

5.4. Problems of interbudgetary relations

The problems of relations between the federal center and the regions remain one of the most acute and complex in the process of developing and adopting the budget for the next financial year. The relevance of these problems is also evidenced by the fact that during the preparation of the 2007 budget, a meeting of the Presidium of the State Council “On improving interbudgetary relations in the Russian Federation” was held. And in July, a Report on the interaction of federal and regional authorities in developing programs for the socio-economic development of regions was presented at a meeting of the State Council.

The Budget Message of the President of the Russian Federation “On Budget Policy in 2007” formulated the main tasks for improving interbudgetary relations. The key direction is a radical increase in the efficiency of state and municipal finance management. At the same time, it was noted that it is necessary to “reduce dependency sentiment in the regions” and strengthen the regions’ motivation to develop their own tax base.

In fact, similar proposals are contained in the already mentioned State Council Report and government documents relating to interbudgetary relations. First of all, this is the “Concept of increasing the efficiency of interbudgetary relations and the quality of management of state and municipal finances in the Russian Federation in 2006-2008”, adopted by the Government, as well as the main indicators of the long-term financial plan for 2007-2009. In addition, the amendments to the Budget Code prepared by the Ministry of Finance are aimed at implementing the same tasks.

It should also be noted that the formation of interbudgetary relations in 2007 took into account changes in tax and budget legislation introduced on January 1, 2007. The main ones include:

• transition from a permitting to a declarative procedure for VAT refunds to exporters;
• reduction of the tax base for corporate income tax by the amount of losses received by them in previous years; reducing the time limits for writing off R&D expenses for corporate income tax;
• establishing a reduction coefficient to the tax rate for the mineral extraction tax (MET), stimulating the further development of oil fields that are at the final stage of development (with a depletion rate of more than 80%) and a zero MET tax rate for new oil fields;
• increasing social tax deductions for personal income tax for training and treatment;
• changes in excise tax rates on excisable goods (products);
• transfer to the budgets of the constituent entities of the Russian Federation of the federal part of the mineral extraction tax in relation to extracted natural diamonds and one-time payments for the use of subsoil (bonuses) for natural diamond deposits.

According to the Ministry of Finance, the envisaged changes in budget and tax legislation will lead to a reduction in budget system revenues by 193.5 billion rubles, of which 23.8 billion rubles. accounts for the consolidated budgets of the constituent entities of the Russian Federation.

A distinctive feature of interbudgetary regulation in 2007 should be the introduction of mechanisms aimed at strengthening the motivation of regions to increase their tax potential and increasing the level of their independence in using investment funds to solve development problems. For these purposes, the methodology for distributing subsidies from the Federal Fund for Financial Support of the Subjects of the Russian Federation and the procedure for providing investment support to the regions were adjusted.

One of the main criteria by which one can ultimately judge the effectiveness of policies in the field of interbudgetary relations is the convergence of the level of socio-economic development and the level of basic social services that the state provides to its citizens throughout the country. Currently, as is known, the degree of differentiation in all the most important economic and social parameters of indicators between the regions of Russia is very high. Thus, budget expenditures per capita vary significantly across different regions: on health care by more than 6 times, on social security by 15 times, on education by more than 5 times. Therefore, the task of equalizing the level of budgetary security and, more broadly, levels of socio-economic development remains one of the main priorities of interbudgetary regulation.

At the same time, as follows from the Explanatory Note to the draft budget, in 2007 the Ministry of Finance predicts sustainable execution of the budgets of the constituent entities of the Russian Federation. At the same time, an analysis of the materials presented for the draft budget shows that the situation with the execution of budgets of the constituent entities of the Federation varies significantly by region. In addition, to date, a register of current expenditure obligations by level of the budget system has not been formed, state social standards have not been adopted, and standards for financial costs for the provision of state and municipal services have not been determined.

Self-test questions

1. What are inter-budgetary relations?
2. What are the principles for building interbudgetary relations in a federal state?
3. What are revenue powers and what are the forms of their manifestation?
4. What are expenditure obligations and what are the forms of their manifestation?
5. Purpose of financial assistance funds.
6. Purpose, source of formation and direction of use of the regional financial support fund.
7. Purpose, source of formation and direction of use of the compensation fund.
8. Purpose, source of formation and direction of use of the fund for co-financing social expenses.
9. Purpose, source of formation and direction of use of the regional development fund.
10. Purpose, source of formation and direction of use of the regional finance reform fund.

Workshops

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Workshop 5. Interbudgetary relations

Presentations

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Tutors

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Topic 5. Interbudgetary relations