The financial basis of local governments is the regional budget. The property and monetary rights granted to these bodies allow you to draw up, consider, approve and, of course, execute your budget.
The regional budget is the main channel for bringing the final result of production to citizens. It is with the help of this source that the social product is redistributed between the strata of the population and administrative-territorial units. In addition to the above, financing of such significant sectors as the food industry, utilities and other budgetary organizations comes from this type of budget. This is a kind of tool for improving the well-being of citizens.
From an economic point of view, the regional budget should perform the following functions:
- Form cash funds involved in the financial support of the functioning of local authorities;
- distribute these funds between the leading sectors of the economy;
- control the financial and economic activities of subordinate organizations, institutions and enterprises.
The formation of the regional budget is carried out by the relevant authorities and consists of the implementation of certain stages associated with its preparation, approval and execution. The main components of this budget, like any other, are the revenue and expenditure parts.
The basis of the revenue is various revenues to the budget. In tax revenues, the largest share is land tax. This type of tax is an economic tool in achieving high land use efficiency. Also, the land tax serves as a source of reimbursement of the costly part of the local budget for the arrangement and development of new territories.
The regional budget should be supported by fixed sources of income. It is these sources that should contribute to an increase in payments, since budget spending tends to a constant increase. Therefore, in the budget of any region, an important role should be assigned to regulatory sources, which are funds coming from top-level budgets.
Regulatory revenues include:
- percentage deductions from tax revenues of top-level budgets;
- subsidies and subventions from higher budgets.
The role of regulatory revenues is to provide financial resources to regional authorities, and this source of revenues serves to increase the interest of local authorities in raising funds to the highest level budget.
Often, regional budget expenditures exceed revenues. In this case, only subsidies or subventions from the higher level budget can save the budget from deficit. However, these sources do not have stimulating qualities and favor the development of a sense of dependency in the regions.
The regional budget cannot exist without its expenditure, the main direction of which is the financing of socio-cultural institutions such as health and public education, as well as other budget organizations. At the same time, the budget structure of different regions varies among themselves. Whereas in the regional, city and regional budgets, expenditures for social and cultural events account for almost half of all expenditures, then in village, rural and district budgets - up to 86%.
With the growth of large cities and towns, expenses per inhabitant increase. And this is one of the important indicators of expenditures of regional budgets. Also, one should not forget about the growing needs of residents of small cities and towns in terms of public utilities.
