The budget system in the Russian Federation in its current form began to form in the late nineties of the last century. A significant milestone was the adoption by the State Duma in 1998 of the first edition of the Budget Code, which enshrined the fundamental principles of the budget system of the Russian Federation.
Budget Code of the Russian Federation
This document, approved by the main representative body of the country, in essence represents a set of basic rules that govern the budget process throughout the country and guarantee the unity of approaches. By its legal force, it is equivalent to such widely known legislative acts as, for example, the Civil Code of the Russian Federation, the Labor Code of the Russian Federation, etc. In the late 90s of the last century, domestic legislators made serious efforts to streamline legal chaos, the result of which was the consolidation of specific tasks and responsibilities for each level of government. And the Budget Code clearly delineated the levels of the budget system of the Russian Federation and defined the rules for financial support of tasks performed by the authorities.
Basic concepts and formulations
Perhaps the central concepts for understanding the foundations of all budget procedures are directly the concepts relating to the budget system of the Russian Federation. And the budget, in essence, is the “pill” of the authorities in which they raise funds — revenues, and then spend them on the goals established by laws. The budget system in the Russian Federation is a kind of union of all these “pods” that the federal, regional and local authorities have, that is, the federal, regional and local budgets.
The Ministry of Finance of the Russian Federation (the main developer of the Budget Code) has been identified as responsible for organizing budgetary procedures at the federal level, financial authorities of the constituent entities of the Russian Federation at the regional level, and financial authorities of municipalities and urban districts at the municipal level. The time period during which the approved budget is valid is the fiscal year, that is, the period from January 1 to December 31 of each calendar year. By the way, in the USA, the financial (and budget) year differs from the calendar year - it starts on October 1, and finishes on September 30.
Russian budget system
The structure of the budget system in the Russian Federation is as follows:
- at the federal level - directly the federal budget and the budgets of state funds (pension and federal health insurance funds, for example);
- at the regional level - the budgets of territories, republics, regions and budgets of territorial funds (for example, a territorial health insurance fund);
- at the local level - district budgets (not districts!), the budgets of settlements, urban districts and areas that exist within urban districts.
By the way, road funds, which many people hear, are formed directly within the budget expenditures of the budget system of the Russian Federation and are not independent.
In order to have an idea of the financial possibilities of a particular level of government, there is a concept of consolidation. As a rule, when considering individual indicators, they use the concepts of “consolidated budget of a municipal district (or city district)”, “consolidated budget of a constituent entity of the Russian Federation” and “consolidated budget of the Russian Federation”, which logically follow from the general budget structure and budget system of the Russian Federation.
Budget consolidation
Consolidation of both the initial indicators and the subsequent reporting on the execution of the budgets of the budget system of the Russian Federation takes place in approximately the following way:
- At the local level, the approach is determined on the basis of the law “On General Principles of Local Self-Government in the Russian Federation”, since the local government authorities work with local budgets. One of the smallest administrative-territorial formations is rural and urban settlements, each of which is legally endowed with certain powers and has an independent “little pill” - the budget for their implementation. The settlements are geographically located within the larger administrative-territorial unit - the municipal district. But the district administration has its own responsibilities, and for their implementation it uses the money of the district budget. The sum of the budgets of all the settlements within the district and the district budget is called the consolidated budget of the district. Urban districts are quite large cities, which may have intracity areas. By law, the city district exercises authority, combining the powers of both the district and the settlement. Accordingly, the urban district has a budget for the urban district.
- At the level of a constituent entity of the Russian Federation, lawmakers endowed the regional government bodies with a number of state powers. Heads of territories, republics and regions take money from their implementation from regional budgets. And the consolidated budget of the region includes both the money of the regional budget and the money of all the consolidated budgets of municipal districts and urban districts, geographically located within the subject of the Russian Federation.
- Well, the consolidated budget of the country as a whole includes all the means of the budget system of the Russian Federation - and the regional consolidated budgets, and the federal budget, and state funds.
Principles of the budget system of the Russian Federation
The Russian budget system itself is built in compliance with a number of basic principles:
- Unity. All levels of the budget system of the Russian Federation operate in a single legal field. There are uniform classifications and uniform reporting forms.
- Separation of income, expenses and allowed sources of deficit coverage between the levels of the budget system of the Russian Federation (each level has its own revenue sources and directions of spending).
- Self-reliance. The budget process is carried out at each level independently. The bodies of state power and local self-government of the corresponding level are fully responsible for its implementation.
- Equality is right. All budgets have the same rights. The higher budget is not entitled to independently decide on the withdrawal of money from the lower budget.
- The completeness of reflection of all income received, expenses incurred and sources of deficit coverage (laws (decisions) on the budget should fully reflect all budget revenues of the budget system of the Russian Federation, as well as expenditure directions, and sources of deficit coverage).
- Balance (expenses should not exceed the volume of all revenues and realistic sources of coverage of the deficit).
- Efficiency (funds should be spent based on the tasks of achieving the maximum economic or social effect from each budget ruble).
- Reliability (realistic planning).
- Cash desk unity (having a single account in the RCC for budget execution).
- Targeted and targeted.
- Jurisdiction (recipients of budgetary funds can receive money only from a higher manager).
- Openness (publicity of all documents).
- The total coverage of all expenses with all income.
These principles are mandatory for all budget levels of the budget system of the Russian Federation.
Budget revenues
Each level of the budget system of the Russian Federation has its own revenues, which are to be credited to a particular budget. The splitting of taxes paid and their transfer to the respective budgets in accordance with the norms of the current legislation are the responsibility of the bodies of the Federal Treasury. To build their work, they use both the provisions of the Budget Code of the Russian Federation and the laws (decisions) on budgets, which fix the standards for crediting and distributing revenue sources.
From the point of view of federal legislation, the revenues of the budget system of the Russian Federation are divided as follows:
- The federal treasury receives part of taxes on corporate profits, VAT, almost all excise taxes (partly on alcohol, tobacco, cars), part excise taxes on fuels and lubricants, taxes on mining, state duty for actions of federal authorities (in fact, the payment for them services), income from various ways of using federal property (rent, sale, etc.), customs duties, payment for the use of forests, water bodies (in fact, income from the exploitation of national wealth), income from foreign economic activity awn, etc. That is, basically, these are incomes, the receipt of which is ensured by the actions of the federal authorities.
- The regional budgets receive taxes on property of organizations, transport tax (both from organizations and citizens), taxes from the gambling business, partly corporate income tax, a large share of income tax, part of excise taxes on alcohol and gasoline, taxes on simplification, various state duties related to the activities of regional bodies of state power, income from the use of regional property, etc.
- Taxes on land, property of individuals, partially income tax, imputation, state duty for the actions of local governments, revenues from municipal property, etc. are credited to local budgets.
Budget spending
Federal law assigned to each level of government a circle of powers that this level of government is required to fulfill. Accordingly, for the exercise of authority, the government assumes the corresponding expenditure obligations. The budgets of the budget system of the Russian Federation are allocated primarily to ensure these expenditure obligations. The allocation of funds to each authority participating in the budget process is carried out in the form of budget allocations. In essence, this is not the so-called “real money”, but the right to part of the “budget pie”. Then, industry workers divide their share between subordinate institutions and other recipients of funds (for example, agricultural enterprises in the form of subsidies). Money is transferred to subordinate institutions in the form of limits on budgetary obligations, within which institutions have the right to enter into various types of agreements to support their activities.
Separately, it is worth noting the phenomenon of public regulatory obligations - these are expenses of the budget system of the Russian Federation, which are almost completely spent on various kinds of social payments (pensions, subsidies, compensations for beneficiaries, etc.). Since here the circle of potential recipients is not limited, it is likely that a situation may arise when in reality more funds will be needed than was planned. Then the budget is adjusted.
Budget relationships
Due to the fact that the rules for the distribution of taxes between all budgets of the state budget system of the Russian Federation are quite rigidly fixed by the current legislation, a situation may arise (and most often develops) that at some level of government money will be collected in the form of sources established by the Budget Code, clearly not enough to exercise authority. That is, there is a budget deficit. Moreover, it should be noted that the funds may not be enough not because the territory is poorly developed economically, but because the taxes that are payable, for example, to the budget of a city settlement, are insufficient. Small and medium-sized businesses can work perfectly and profitably in the city, but their payments will go to higher budgets. And the land tax, which remains on the ground, is very small in its absolute value, since the cadastral valuation of the lands on the basis of which it is calculated is also very small.
Therefore, in order to ensure equal constitutional rights of citizens throughout Russia, regardless of the economic potential of the territory where they live, a mechanism for equalizing budgetary provision begins to work. That is, the higher budget (most often) calculates the average cost of providing a standard set of budget services (not to be confused with state ones, since the budget also includes street lighting, road maintenance, and all similar guarantees from the state!) And allocates to those lower budgets where funds for this minimum standard are not enough, subsidies for equalizing security.
As a rule, the federal budget aligns the regional ones, and the regional ones align the local ones.
Sometimes the opposite situation may arise, which translates into the concept of “negative transfer”. It arises from the budgets of donor territories. Then the most well-off lower budget is obliged to transfer a certain estimated amount to the higher budget. This money will go to the fund for financial support of budgets, from which subsidies are allocated that go to equalize the budgetary provision of other territories. The size of the negative transfer will be determined at the stage of formation of draft budgets. If it is transferred in full by the budget, then all other incomes additionally received during the budget year are not subject to withdrawal.
Subsidies and subventions
Sometimes assistance to a lower level of government can be provided in a completely different format - in the form of cash tranches, called subsidies. They have a set of characteristic features:
- are exclusively targeted (in contrast to subsidies, which can be used to secure any obligations assumed by recipients of funds from budgets of all levels);
- are granted on conditions that are established by the power level that allocates them from their financial resources;
- granted to fulfill the powers assigned to authorities - which are recipients of money;
- almost always imply co-financing conditions, that is, a higher budget allocates funds in some (usually greater) percentage of the level of total demand, and a lower budget contributes, covering the balance at the expense of its money.
The Federation usually allocates money in the form of subsidies for the implementation of national projects. A classic example is a program that provides resettlement of people from dilapidated and emergency housing. The powers to provide housing for citizens relate to the tasks of municipalities. The Federation on its terms allocates a subsidy for these purposes for the regions, and they provide their share of co-financing and carry out all necessary measures.
In addition to subsidies, there is another quite interesting type of tranches from higher to lower budgets, which is called subventions. They are designed to financially ensure the exercise of delegated authority. The reason for the appearance of cash flows of this kind is quite simple: the legislative distribution of powers, that is, responsibilities to ensure the constitutional rights of the inhabitants of Russia, does not work quite effectively in all cases. A classic example is the functioning of secondary schools. The legislators assigned the expenses on the general educational process (salaries, professional retraining, acquisition of teaching and visual aids, educational literature) to the regional authorities, and the maintenance of school buildings, the payment of salaries to technical personnel - to the tasks of municipalities. Since schools work directly "on the ground", it is local governments that are closer and more accessible to solve problems in the full sense of the word. Therefore, in most regions, relevant laws have been adopted at the level of regional representative power, and local government bodies of municipalities have been vested with powers regarding the implementation of the general educational process. Accordingly, they already act as the founders of schools, build or adapt suitable buildings, hire pedagogical teams that will teach schoolchildren. But money for payment, for example, teachers' salaries will come from the regional budget in the form of a subvention, and the municipality will pay for the heat and electricity consumed from its wallet.
Subventions also have a set of characteristic features:
- They, like subsidies, are purely targeted in nature, and the money that came to teachers for salaries cannot be spent on the salaries of library workers.
- The amount of the subvention should fully cover the costs of the execution of the transferred powers. Its recipient can, but is not obligated to, find funds from his wallet to finance the powers that were passed to him by a higher level of government in law. In the same way, the recipient, if he does not have enough funds for the subvention, can fulfill the transferred powers only to the extent that this money was enough. Возвращаясь к примеру со школами, приведенному выше, эту картину можно представить примерно таким образом: на территории муниципалитета, исходя из числа имеющихся школьников, необходимо в течение года осуществлять общеобразовательный процесс в десяти школах, средств же из регионального бюджета передано только на пять школ. Соответственно, муниципалитет может либо открыть только пять школ, либо содержать все десять, но полгода, либо уменьшить размер выплачиваемой зарплаты в два раза. Ответственность в любом случае будет лежать на регионе.
