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Interbudget Reforming in Russia
S.N.Ryabukhin, Auditor of Account Chamber of RF
Further development of interbudget relations is a key issue of budget policy in 2004. Reasoning from decisions made concerning distribution of powers among the levels of budget system, in 2004 new approaches to the system of financial support distribution among regions are being developed. The new principles of interbudget relations are to be introduced in 2005.
These are urgent tasks of current year regarding interbudget relations:
- ensuring of regional budgets balance in connection with alteration of tax legislation;
- smoothing out irregularity of on-going changes impact on regional budgets.
Total value of financial support to the regions will increase by 5% in 2004. This figure is a bit lower than federal budget expenses growth. The reason is lack of growth of tax proceeds in Fund of Financial Support of Regions.
Nevertheless we should keep in mind that tax reforms planned for the coming year will bring rise of regions' tax yield from 41% to 44% in terms of consolidated budget.
Besides that this year the pace of regional budget incomes growth excluding financial support will account for 14.6%, and federal one-only 6.6.% in comparison with the expected figure of 2003.
Non-interest expenditures of regional budgets will increase by 15.5%, the ones of federal budget will come up by 10%. Thus regional budgets expenditures pace outgoes federal budget expenditures pace.
Regional budgets expenditures share in consolidated budges will amount to 44.7% in current year compared with 44.2 in 2003.
In volume of expenditures of regional budgets in consolidated budget the regional budgets expenses will take over the federal budget expenses by 10%. Single social tax and interest expenses are excluded. Revenue sources and expenditures-related powers are gradually passing into the hands of regions. Realization of RF President proposals with regard to single social tax will reinforce the positive tendency.
In order to relieve the stress connected with bringing into practice regional budgets proposals aimed at increase of regions' financial support volume by 16 billion rubles are prepared. These are the courses of their use:
1. Paying of federal budget's debt with regard to transferred housing amounting to 5.3 billion rubles.
2. Increase of state subsidies aimed at stabilization to regions by 1.4 billion rubles.
3. Allocate financial means for liquidation of consequences of natural disasters in agriculture up to 7 billion rubles.
4. Support of regional road funds amounting to 2 billion rubles.
Additional financial support will make regional budget more sure-footed and will allow regions to pay off their depts.
For the year of 2004 an aim was laid down which was to relieve the stress connected with regional budgets bringing into practice. Federal budget envisages subsidies in the amount of 21 billion rubles for this purpose, which 5 times exceeds the level of 2003. These funds are intended for the following aims:
- compensation of losses resulting from abolishment or centralization of some taxes;
- adding up to supply in connection with salary growth;
- support of regional budgets bringing into practice.
Motions with regard to the financial support distribution among regions will be introduced by Government in State Duma between the second and the third readings of draft federal budget for 2004.
State Duma has considered federal draft bills "About amendments and supplements to Budget Code of the Russian Federation with regard to interbudget relation control", "About amendments and supplements to Tax Code of the Russian Federation and declaring the law of the Russian Federation "About basis of tax system of the Russian Federation" null and void" in the first reading. The draft bills are of great importance for budget system of Russia.
The introduced draft bills are generally correspond to the provisions of RF Budget Federalism Development Program for the term up to the year of 2005.
However growth of budget independence and liability of regional and local governmental bodies being the aim of the reform is not supported by the required financing.
Some provisions are not coordinated with draft bills aimed at reform of state and local governments. There are contradictions in the draft bills. For example, excluding of categories "minimal state social standards", "minimal budget limits" from the text of Budget Code contradicts to social orientation of the reforms.
Authorities and functions of governmental bodies dealing with predicting of RF consolidated budget are excluded for no reason. Their responsibilities with regard to the budget system balance on the whole and on regional and local levels are weakened.
Authority of various levels of representational government bodies with regard to forming and distribution of means of interbudget transfers is impaired. The proposed amendments create an obstacle for increase of funds volume over inflation level in order to render financial assistance to lover-level budgets.
In accordance with the opinion of RF Account Chamber a quality revision of draft bills is required. Impartial account of regional indices will help reveal urgent problems of Russian economy and weakness of regions' social status.
Their overcoming is a must when it comes to realization of President's program of our citizens' poverty liquidation on the territory of the country.
Ryabukhin Sergey Nikolaevich. Former member of Council of Federation of Federal Assembly of the Russian Federation, ex-Deputy Chairman of Committee for Science, Culture, Education, Healthcare and Ecology under Council of Federation, ex- Chairman of Interim Committee for Youth Policy under Council of Federation.
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