Presentations on the topic of interbudgetary relations in the Russian Federation. Self-test questions

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Presentation on the topic: Interbudgetary relations

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The modern system of interbudgetary financial flows began to take shape in the Russian Federation, starting in 1991. The modern system of interbudgetary financial flows began to take shape in the Russian Federation, starting in 1991. By this time, before the formation of the independent Russian state, the budget system of the RSFSR was part of the centralized budget system of the Soviet Union. Due to the absence of any uniform norms for securing revenue sources and spending powers, for each ATE there were individual proportions for the distribution of tax and non-tax revenues, from which pre-agreed expenses were financed.

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The new Constitution of 1993 and the strengthening of the position of federal authorities made it possible to carry out a reform of inter-budgetary relations in 1994, the main goal of which was to formalize the issues of distribution of revenues between the federal and regional budgets and the provision of financial assistance to budgets at lower levels. The new Constitution of 1993 and strengthening the position of federal authorities made it possible to carry out a reform of interbudgetary relations in 1994, the main goal of which was to formalize the issues of distribution of revenues between the federal and regional budgets and the provision of financial assistance to lower-level budgets

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As a result of the reforms carried out, the system of federal financial support for the regions currently includes several channels for the provision of financial resources, which can be divided into two groups: As a result of the reforms carried out, the system of federal financial support for the regions currently includes several channels for the provision of financial resources, which can be divided into two groups: - regular and - irregular types of financial assistance. As part of regular financial assistance, it is necessary to highlight, first of all, transfers from the Federal Fund for Financial Support of Regions, subsidies to the budgets of closed ATOs, and subventions to the city of Moscow. Irregular financial assistance mainly includes expenses within the framework of various federal programs, as well as funding from ministries and departments.

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The main channel of regularly provided federal financial assistance to the regions is the Regional Financial Support Fund, which, since 1994, has been formed and distributed in accordance with the following principles. The main channel of regularly provided federal financial assistance to the regions is the Regional Financial Support Fund, which, since 1994, has been formed and distributed in accordance with the following principles. The value of the FFPR is approved in the form of a fixed share of tax revenues of the federal budget (in 1994 - 22% of VAT revenues, in 1995 - 27% of VAT revenues to the federal budget, in 1996-97 - 15% of tax revenues of the federal budget for excluding import duties...). Every year 70-80 subjects of the Federation out of 88 have the right to receive transfers from the FFPR.

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The primary point in organizing the system of interbudgetary relations is the issue of distribution of expenditure obligations between levels of government. The primary point in organizing the system of interbudgetary relations is the issue of distribution of expenditure obligations between levels of government. Economic theory provides virtually no recommendations on the distribution of expenditure obligations. It is assumed that a particular government service should be provided by the level of government that most closely represents the community of people that benefits from the provision of that service. From this point of view, for example, it is justified to finance local goods from the municipal budget, and public services of national importance - such as defense, security - from the central budget. However, most public services do not fall completely into any of the listed categories and, therefore, it is not possible to resolve the issue of distribution of obligations for their financing according to theoretical considerations alone.

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legislative regulation; legislative regulation; financing; administration. At the same time, regulation cannot be quantified, and financing and administration, although they can be quantified, do not reflect the full range of actions of the government to fulfill the expenditure obligation.

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Indirect assessment of regional expenditure needs based on factor analysis. Indirect assessment of regional expenditure needs based on factor analysis. Assessment of regional expenditure needs based on existing targeted transfers. Application of a single standard of budget expenditures for all ATOs of the state. Assessment of regional expenditure needs based on actual expenditures.

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This method can be used in the presence (isolation) of factors that determine the demand and/or cost of providing public services in the ATO (the number of consumers of certain types of public services, costs of heating and lighting, transport and wages, etc.). This method can be used in the presence (isolation) of factors that determine the demand and/or cost of providing public services in the ATO (the number of consumers of certain types of public services, costs of heating and lighting, transport and wages, etc.).

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A similar approach is used when there is insufficient statistical information to analyze the influence of various factors on the amount of expenses, but at the same time, a certain number of targeted grants are allocated from the national budget. In this case, to calculate the transfer, the ratio of federal funds received in the region per capita and the national average grant size is determined, which is then used as one of the coefficients in the transfer distribution formula. A similar approach is used when there is insufficient statistical information to analyze the influence of various factors on the amount of expenses, but at the same time, a certain number of targeted grants are allocated from the national budget. In this case, to calculate the transfer, the ratio of federal funds received in the region per capita and the national average grant size is determined, which is then used as one of the coefficients in the transfer distribution formula. This approach has several advantages, the most important of which is that when applied, equalizing transfers can complement targeted transfers, and therefore, there are no conflicts between ministries and departments responsible for the distribution of targeted and equalizing transfers, and budgets at lower levels are not deprived of targeted sources of financing.

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To implement this approach in practice, it is necessary that there is no significant differentiation in the cost of providing public services between provinces. To implement this approach in practice, it is necessary that there is no significant differentiation in the cost of providing public services between provinces.

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Obviously, this approach is not possible to use on a long-term basis, because Regional authorities have the opportunity to influence the amount of expenses in order to receive a larger transfer volume in the future. It must be taken into account that the state always contains underdeveloped territories with low cost of public services due to: - interregional differentiation of prices, - the inability to provide certain types of services due to the lack of necessary infrastructure - any other reasons related to the level of economic development.

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Revenues of territorial budgets include: Revenues of territorial budgets include: 1) Own budget revenues - incomes fixed on a permanent basis in whole or in part 2) Regulatory revenues - these are federal and regional taxes and other payments for which deduction standards are established. Regulating income is carried out to avoid vertical and horizontal imbalances.

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There are three options for assigning tax revenues to local authorities: There are three options for assigning tax revenues to local authorities: 1) all tax revenues coming from the territory under their jurisdiction are assigned. At the same time, it is established that part of the revenues is transferred to the highest level of the budget system to meet the spending obligations of the national government. Because this option may reduce the efficiency of interterritorial income redistribution and also interfere with fiscal stabilization, it does not represent the most effective method of mobilizing public resources and may create inadequate incentives for local governments to finance national spending obligations.

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The second option involves assigning all taxes to the national government and the subsequent transfer of funds to lower authorities through grants or other transfers, as well as by establishing standards for revenue deductions for all or individual taxes to lower-level budgets. The second option involves assigning all taxes to the national government and the subsequent transfer of funds to lower authorities through grants or other transfers, as well as by establishing standards for revenue deductions for all or individual taxes to lower-level budgets. The main disadvantage of such a system is the complete lack of connection between the level of government on the territory of which certain taxes are collected and the level of making spending decisions - the main prerequisite for creating an effective system of interbudgetary relations. Without the existence of such a connection, there is a risk of fiscal illusion, i.e. risk of over-financing local spending needs. On the other hand, the likelihood of frequent and unjustified reductions in the volume of financial resources transferred to the lower levels of the budget system may lead to the impossibility of creating a stable system of financing public services at the local and/or regional level.

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3) Assigning some part of tax powers to local or regional authorities, and, if necessary, compensating for missing revenues by assigning shares from regulatory taxes or by transferring transfers to the ATO budgets. 3) Assigning some part of tax powers to local or regional authorities, and, if necessary, compensating for missing revenues by assigning shares from regulatory taxes or by transferring transfers to the ATO budgets. The key issue in implementing such a revenue distribution scheme is the choice of taxes assigned to local/regional authorities (local/regional taxes), as well as federal taxes, a certain share of the revenue of which is credited to regional/local budgets (regulatory taxes). In the case of assigning tax powers to the lower levels of government, which makes it possible to link the amount of the tax burden and the expenditure decisions made, local authorities in their actions are guided by cost-benefit considerations, which leads to increased economic efficiency.

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The allocation of grants can occur in two directions: The allocation of grants can occur in two directions: - in the form of non-targeted - targeted transfers. Each grant, in turn, can be allocated in a fixed amount or be subject to renewal, be conditional or unconditional, and also be allocated on the basis of joint financing. The choice of a specific mechanism for allocating interbudgetary transfers depends on the objectives of economic and fiscal policy at a given time.

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The existence of a fiscal gap between a region's ability to generate revenue and its spending needs, arising from the tax collection advantages of the central government and the relatively higher level of spending of regions and localities; - the existence of a fiscal gap between the region's ability to generate revenue and its spending needs, arising from the advantages that the central government has in the field of tax collection and the relatively higher level of spending of regions and localities; - the need to reduce fiscal inequities arising from differences in revenue-generating capacity that exist between different regions (especially those independent of regional policies) and their different spending needs; - the need to adjust fiscal inefficiency arising from differences in the amount of net fiscal benefit between regions; - the existence of positive externalities (due to the flow of funds from other administrative units) from various regional expenditures; - ensuring a certain uniformity in the main types of regional expenditure programs.

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Transfers are funds coming from federal and regional funds for financial support of regions, the amount of which is calculated according to the methodology established by the Government. Transfers to the population - budget funds to finance mandatory payments to the population: pensions, scholarships, benefits, compensation, and other social benefits established by law. Subsidy – funds provided to the budget of another level of the budget system on a gratuitous and irrevocable basis to cover current expenses. Subvention is funds provided to the budget of another level of the budget system or to a legal entity on a free and irrevocable basis for the implementation of targeted expenses. Subsidy – budget funds transferred to the budget of another level, to legal entities or individuals, on the basis of shared financing of targeted expenses.

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regarding the distribution of interbudgetary transfers regarding the distribution of interbudgetary transfers - a set of equalizing transfers is needed: from targeted (conditional) transfers to solve specific problems of economic policy, to other non-targeted (unconditional) transfers to level out the vertical or horizontal imbalance of the budget system. At the same time, it is necessary, as far as possible, to avoid transfers aimed at simply covering the gap between ATO budget revenues and their expenses, in order to avoid disincentives for fiscal efforts and reduce the responsibility of regional authorities for tax and expenditure policies.

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However, simply covering the deficit of lower-level budgets should not be the goal of the transfer policy, because a vertical imbalance can arise as a result of budgetary policy at the level of a subnational government: for example, as a result of decisions to increase spending or refuse to increase tax rates. However, simply covering the deficit of lower-level budgets should not be the goal of the transfer policy, because a vertical imbalance can arise as a result of budgetary policy at the level of a subnational government: for example, as a result of decisions to increase spending or refuse to increase tax rates.

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Application of separate mechanisms for leveling vertical and horizontal imbalances. Application of separate mechanisms for leveling vertical and horizontal imbalances. The equalization of the deficit of subnational budgets is carried out by dividing tax revenues and allocating transfers from the national budget, while the equalization of fiscal potential is carried out through horizontal payments from regions with high budgetary security to low-income regions. A similar system is used in the Federal Republic of Germany.

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2) A comprehensive system of equalizing transfers. 2) A comprehensive system of equalizing transfers. Both vertical and horizontal imbalances are leveled out using a unified system of equalizing transfers and special grants. A similar approach is used in the budget systems of Australia and Canada.

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3) Leveling only the vertical imbalance of the budget system. 3) Leveling only the vertical imbalance of the budget system. Subnational budget deficits are leveled out by fixing regulatory taxes and equalizing transfers, but no separate measures are taken to level out horizontal imbalances. In this case, the migration of capital and labor arises as a result of the difference in income in the ATO, as well as the net fiscal benefit in the regions (the net benefit from government spending and taxes paid). With this option of budget policy, it is possible to allocate special grants, which, among other purposes, can have a horizontal equalizing effect. This approach is widespread in the United States.

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1) The system of interbudgetary transfers should primarily pursue the goals of macroeconomic stabilization. 1) The system of interbudgetary transfers should primarily pursue the goals of macroeconomic stabilization. 2) The methodology for distributing equalization transfers should be approved in the context of the state’s fiscal policy (in the government’s medium-term fiscal program for three years in advance). 3) The objectives of the allocation of equalization transfers must be clearly formulated, and there must be a possibility for their regular monitoring. 4) When planning transfers, it is necessary to take into account funds allocated through other channels. Due to the fact that, in addition to equalization transfers, funds are sent to the regions within the framework of programs of various ministries and departments, the Ministry of Finance needs to take them into account when allocating transfers. 5) When allocating transfers, it is necessary to consider possible alternatives. In some cases, it is more efficient to finance the provision of public services not through lower-level budgets, but through direct payment to the service provider (especially if the national government wants to increase the diversification and efficiency of service delivery).

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Methods that equalize the income of regions in proportion to the deviation from a certain value (for example, from the average per capita income for all regions or their groups); Methods that equalize the income of regions in proportion to the deviation from a certain value (for example, from the average per capita income for all regions or their groups); methods that bring regional incomes to a level not lower than a given one; techniques that are combinations of techniques from the first two groups. At the same time, for each of the methods, an additional option can be distinguished: in addition to calculating transfers based on the unconditional equalization of the average per capita income of the regions, it is possible to carry out a calculation based on the equalization of the average per capita income, taking into account reduction factors that provide incentives for the regions’ efforts to collect taxes. Income equalization is based on the provision of financial assistance only depending on the differentiation by region of average per capita income, adjusted using special coefficients (budget expenditure index). The point of introducing a correction coefficient is to take into account the interregional differentiation of the cost of providing public services (i.e., it is a kind of “interregional deflator” of prices for the provision of budget services).

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Methodology of expenditure-income equalization, based on ensuring a minimum level of regional deficit. Methodology of expenditure-income equalization, based on ensuring a minimum level of regional deficit. Methodology of expenditure-income equalization, based on the distribution of FFPR in proportion to the gap between income and expenditure of regional budgets. The FFPR distribution method combines the first and second options for expenditure-income equalization. These methods are based on providing financial assistance in accordance with the gap between income (income potential) and expenses (expenditure needs) of the regions. Just as in the case of equalizing per capita income, it is possible to distribute transfers in a way that would ensure a certain minimum level of regional deficit determined by the volume of the Fund, a simple distribution of FFSR funds in proportion to the gap between the income and expenses of regional budgets, as well as a combination of these two options.

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The federal government has the authority to regulate issues of war and peace, defense, law and order, national public debt and state property, the monetary and banking system, trade and commercial relations. The federal government has the authority to regulate issues of war and peace, defense, law and order, national public debt and state property, the monetary and banking system, trade and commercial relations. Canada's budget system follows a federal system of government - each level of government has its own budget. The revenue base of the federal budget consists of receipts from federal taxes, fees and other payments, and provincial budget revenues include tax payments and interbudgetary transfers received from the federal budget

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Each province received the right to a share of federal tax revenues on its territory, the same for all provinces. Provinces also have the right to increase the federal tax rate on their territory in order to transfer additional tax revenues to their budgets. Each province received the right to a share of federal tax revenues on its territory, the same for all provinces. Provinces also have the right to increase the federal tax rate on their territory in order to transfer additional tax revenues to their budgets. This procedure applies to personal and corporate income tax, goods and services tax (analogous to value added tax). Taxes on natural resources and property taxes are included in provincial budget revenues.

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The formula is structured in such a way that federal funds are distributed among seven provinces - Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, Manitoba and Saskatchewan. The formula is structured in such a way that federal funds are distributed among seven provinces - Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, Manitoba and Saskatchewan. These federal subjects have below average income potential. Revenue potential is calculated as the difference between the average per capita revenue of each tax for the entire five provinces, approved as a federal standard, and the average per capita tax revenue in the province. Tax revenues are calculated at the average rates in effect in all provinces. Tax potential is calculated based on 33 items, including direct and indirect taxes.

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Interbudgetary relations

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

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The modern system of interbudgetary financial flows began to take shape in the Russian Federation starting in 1991. By this time, before the formation of the independent Russian state, the budget system of the RSFSR was part of the centralized budget system of the Soviet Union. Due to the absence of any uniform norms for securing revenue sources and spending powers, for each ATE there were individual proportions for the distribution of tax and non-tax revenues, from which pre-agreed expenses were financed.

Slide 4

History (continued)

The new Constitution of 1993 and the strengthening of the positions of federal authorities made it possible to carry out a reform of interbudgetary relations in 1994, the main goal of which was to formalize the issues of distribution of revenues between the federal and regional budgets and the provision of financial assistance to lower-level budgets

Slide 5

As a result of the reforms, the system of federal financial support for regions currently includes several channels for the provision of financial resources, which can be divided into two groups: - regular and - irregular types of financial assistance. As part of regular financial assistance, it is necessary to highlight, first of all, transfers from the Federal Fund for Financial Support of Regions, subsidies to the budgets of closed ATOs, and subventions to the city of Moscow. Irregular financial assistance mainly includes expenses within the framework of various federal programs, as well as funding from ministries and departments.

Slide 6

The main channel of regularly provided federal financial assistance to the regions is the Regional Financial Support Fund, which, since 1994, has been formed and distributed in accordance with the following principles. The value of the FFPR is approved in the form of a fixed share of tax revenues of the federal budget (in 1994 - 22% of VAT revenues, in 1995 - 27% of VAT revenues to the federal budget, in 1996-97 - 15% of tax revenues of the federal budget for excluding import duties...). Every year 70-80 subjects of the Federation out of 88 have the right to receive transfers from the FFPR.

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The task of interbudgetary relations

Distribute expenses Distribute income according to the appropriate budget

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Classification of interbudgetary relations

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The primary point in organizing the system of interbudgetary relations is the issue of distribution of expenditure obligations between levels of government. Economic theory provides virtually no recommendations on the distribution of expenditure obligations. It is assumed that a particular government service should be provided by the level of government that most closely represents the community of people that benefits from the provision of that service. From this point of view, for example, it is justified to finance local goods from the municipal budget, and public services of national importance - such as defense, security - from the central budget. However, most public services do not fall completely into any of the listed categories and, therefore, it is not possible to resolve the issue of distribution of obligations for their financing according to theoretical considerations alone.

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Components of an expenditure obligation:

legislative regulation; financing; administration. At the same time, regulation cannot be quantified, and financing and administration, although they can be quantified, do not reflect the full range of actions of the government to fulfill the expenditure obligation.

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Approaches for assessing the expenditure needs of regional budgets.

Indirect assessment of regional expenditure needs based on factor analysis. Assessment of regional expenditure needs based on existing targeted transfers. Application of a single standard of budget expenditures for all ATOs of the state. Assessment of regional expenditure needs based on actual expenditures.

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1. Indirect assessment of the regions' expenditure needs based on factor analysis.

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2. Assessing the spending needs of the regions based on existing targeted transfers.

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3. Application of a single standard of budget expenditures for all ATOs of the state.

To implement this approach in practice, it is necessary that there is no significant differentiation in the cost of providing public services between provinces.

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4. Assessment of regional expenditure needs based on actual expenditures.

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Revenues of territorial budgets include: 1) Own revenues of budgets - revenues fixed on a permanent basis in whole or in part 2) Regulatory revenues - these are federal and regional taxes and other payments for which deduction standards are established. Regulating income is carried out to avoid vertical and horizontal imbalances.

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Distribution of tax revenues between levels of government.

There are three options for assigning tax revenues to local authorities: 1) all tax revenues coming from the territory under their jurisdiction are assigned. At the same time, it is established that part of the revenues is transferred to the highest level of the budget system to meet the spending obligations of the national government. Because this option may reduce the efficiency of interterritorial income redistribution and also interfere with fiscal stabilization, it does not represent the most effective method of mobilizing public resources and may create inadequate incentives for local governments to finance national spending obligations.

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Options for securing tax revenues (continued)

The second option involves assigning all taxes to the national government and the subsequent transfer of funds to lower authorities through grants or other transfers, as well as by establishing standards for revenue deductions for all or individual taxes to lower-level budgets. The main disadvantage of such a system is the complete lack of connection between the level of government on the territory of which certain taxes are collected and the level of making spending decisions - the main prerequisite for creating an effective system of interbudgetary relations. Without the existence of such a connection, there is a risk of fiscal illusion, i.e. risk of over-financing local spending needs. On the other hand, the likelihood of frequent and unjustified reductions in the volume of financial resources transferred to the lower levels of the budget system may lead to the impossibility of creating a stable system of financing public services at the local and/or regional level.

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3) Assigning some part of tax powers to local or regional authorities, and, if necessary, compensating for missing revenues by assigning shares from regulatory taxes or by transferring transfers to the ATO budgets. The key issue in implementing such a revenue distribution scheme is the choice of taxes assigned to local/regional authorities (local/regional taxes), as well as federal taxes, a certain share of the revenue of which is credited to regional/local budgets (regulatory taxes). In the case of assigning tax powers to the lower levels of government, which makes it possible to link the amount of the tax burden and the expenditure decisions made, local authorities in their actions are guided by cost-benefit considerations, which leads to increased economic efficiency.

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Conclusion: options for transferring resources from one level of budgetary authority to another

1) income sharing 2) grant system. The division of income can be carried out in several types: - division of the tax base - centralization of tax revenues and their subsequent distribution according to selected criteria.

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Options for transferring resources from one level of budgetary authority to another (continued)

The allocation of grants can occur in two directions: - in the form of non-targeted - targeted transfers. Each grant, in turn, can be allocated in a fixed amount or be subject to renewal, be conditional or unconditional, and also be allocated on the basis of joint financing. The choice of a specific mechanism for allocating interbudgetary transfers depends on the objectives of economic and fiscal policy at a given time.

Slide 22

The advantages and disadvantages of decentralization include

The existence of a fiscal gap between a region's ability to generate revenue and its spending needs, arising from the tax collection advantages of the central government and the relatively higher level of spending of regions and localities; - the need to reduce fiscal inequities arising from differences in revenue-generating capacity that exist between different regions (especially those independent of regional policies) and their different spending needs; - the need to adjust fiscal inefficiency arising from differences in the amount of net fiscal benefit between regions; - the existence of positive externalities (due to the flow of funds from other administrative units) from various regional expenditures; - ensuring a certain uniformity in the main types of regional expenditure programs.

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Regulatory revenues also include:

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Regarding the distribution of interbudgetary transfers, a set of equalizing transfers is needed: from targeted (conditional) transfers to solve specific economic policy problems, to other non-targeted (unconditional) transfers to level out the vertical or horizontal imbalance of the budget system. At the same time, it is necessary, as far as possible, to avoid transfers aimed at simply covering the gap between ATO budget revenues and their expenses, in order to avoid disincentives for fiscal efforts and reduce the responsibility of regional authorities for tax and expenditure policies.

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Vertical imbalance occurs when there is a difference in own income and expenditure obligations at different levels of the budget system.

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Horizontal imbalance occurs when the own fiscal potential of regional authorities at the same level of the budget system differs.

In practice, only some countries use the methodology for assessing the fiscal potential of territories on a regular basis for the purpose of calculating transfers (the most advanced in this direction are: among federal states - Australia, Canada and Germany, among unitary states - Denmark and the UK).

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State policy in the field of interbudgetary transfers to align vertical and horizontal imbalances

Application of separate mechanisms for leveling vertical and horizontal imbalances. The equalization of the deficit of subnational budgets is carried out by dividing tax revenues and allocating transfers from the national budget, while the equalization of fiscal potential is carried out through horizontal payments from regions with high budgetary security to low-income regions. A similar system is used in the Federal Republic of Germany.

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State policy in the field of interbudgetary transfers to level out vertical and horizontal imbalances (continued)

2) A comprehensive system of equalizing transfers. Both vertical and horizontal imbalances are leveled out using a unified system of equalizing transfers and special grants. A similar approach is used in the budget systems of Australia and Canada.

Slide 29

3) Leveling only the vertical imbalance of the budget system. Subnational budget deficits are leveled out by fixing regulatory taxes and equalizing transfers, but no separate measures are taken to level out horizontal imbalances. In this case, the migration of capital and labor arises as a result of the difference in income in the ATO, as well as the net fiscal benefit in the regions (the net benefit from government spending and taxes paid). With this option of budget policy, it is possible to allocate special grants, which, among other purposes, can have a horizontal equalizing effect. This approach is widespread in the United States.

Slide 30

Basic principles of interbudgetary. relations

1) The system of interbudgetary transfers should primarily pursue the goals of macroeconomic stabilization. 2) The methodology for distributing equalization transfers should be approved in the context of the state’s fiscal policy (in the government’s medium-term fiscal program for three years in advance). 3) The objectives of the allocation of equalization transfers must be clearly formulated, and there must be a possibility for their regular monitoring. 4) When planning transfers, it is necessary to take into account funds allocated through other channels. Due to the fact that, in addition to equalization transfers, funds are sent to the regions within the framework of programs of various ministries and departments, the Ministry of Finance needs to take them into account when allocating transfers. 5) When allocating transfers, it is necessary to consider possible alternatives. In some cases, it is more efficient to finance the provision of public services not through lower-level budgets, but through direct payment to the service provider (especially if the national government wants to increase the diversification and efficiency of service delivery).

Slide 31

Possible options for the distribution of the Regional Financial Support Fund according to the principles of income and expenditure-income equalization:

Methods of income equalization Methods of expenditure-income equalization

Slide 32

Income equalization techniques

Methods that equalize the income of regions in proportion to the deviation from a certain value (for example, from the average per capita income for all regions or their groups); methods that bring regional incomes to a level not lower than a given one; techniques that are combinations of techniques from the first two groups. At the same time, for each of the methods, an additional option can be distinguished: in addition to calculating transfers based on the unconditional equalization of the average per capita income of the regions, it is possible to carry out a calculation based on the equalization of the average per capita income, taking into account reduction factors that provide incentives for the regions’ efforts to collect taxes. Income equalization is based on the provision of financial assistance only depending on the differentiation by region of average per capita income, adjusted using special coefficients (budget expenditure index). The point of introducing a correction coefficient is to take into account the interregional differentiation of the cost of providing public services (i.e., it is a kind of “interregional deflator” of prices for the provision of budget services).

Slide 33

Methods of expenditure-income equalization

Methodology of expenditure-income equalization, based on ensuring a minimum level of regional deficit. Methodology of expenditure-income equalization, based on the distribution of FFPR in proportion to the gap between income and expenditure of regional budgets. The FFPR distribution method combines the first and second options for expenditure-income equalization. These methods are based on providing financial assistance in accordance with the gap between income (income potential) and expenses (expenditure needs) of the regions. Just as in the case of equalizing per capita income, it is possible to distribute transfers in a way that would ensure a certain minimum level of regional deficit determined by the volume of the Fund, a simple distribution of FFSR funds in proportion to the gap between the income and expenses of regional budgets, as well as a combination of these two options.

Slide 34

Canada is a federal state. Currently, Canada consists of 12 federal subjects: ten provinces and two territories. There are also approximately 5,000 municipalities in Canada, including cities, villages, townships, counties and special service areas.

Slide 35

The federal government has the authority to regulate issues of war and peace, defense, law and order, national public debt and state property, the monetary and banking system, trade and commercial relations. Canada's budget system follows a federal system of government - each level of government has its own budget. The revenue base of the federal budget consists of receipts from federal taxes, fees and other payments, and provincial budget revenues include tax payments and interbudgetary transfers received from the federal budget

Slide 36

Slide 37

Provincial budgets are required to fund public education, health care and municipal services. Both levels of the budget system have spending obligations in areas of common interest: such as, for example, agriculture and forestry. The federal government also bears the cost of social security.

Slide 38

Financial aid

allocated in the form of targeted and non-targeted transfers. There are programs and financial assistance within the framework of the financial support plan - non-targeted transfers to equalize budget revenues

Slide 39

Calculation of equalization transfers

The formula is structured in such a way that federal funds are distributed among seven provinces - Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, Manitoba and Saskatchewan. These federal subjects have below average income potential. Revenue potential is calculated as the difference between the average per capita revenue of each tax for the entire five provinces, approved as a federal standard, and the average per capita tax revenue in the province. Tax revenues are calculated at the average rates in effect in all provinces. Tax potential is calculated based on 33 items, including direct and indirect taxes.

Interbudgetary relations are relations between government bodies of the Russian Federation, government bodies of the constituent entities of the Russian Federation and local governments.

The modern system of budgetary relations in the Federation was predetermined by the adoption in 1993. Constitution of the Russian Federation. All large national and administrative-territorial entities received the status of subjects of the Russian Federation. The introduction into legal circulation of the term “subject of the Federation” did not have a formal meaning, but meant that all territories that are part of the Russian Federation acquired the status of state legal entities, i.e., the transfer of relations with them to a contractual level and the recognition of their sovereignty in the areas , not transferred to the jurisdiction of the Federation. As a result of the differentiation in the Constitution of the powers of the Russian Federation and its subjects, three levels of competence were defined and fixed: issues of jurisdiction and powers of the Federation, subjects of the Federation and issues of their joint jurisdiction. Local self-government is separated from the state, and its sphere of competence is defined. The Constitution established the composition of the subjects of the Russian Federation. It included 89 subjects: 21 republics, 10 autonomous okrugs, 6 territories, 1 autonomous region, 49 regions and 2 federal cities - Moscow and St. Petersburg. All subjects of the Federation are recognized as equal in their relations with federal government bodies. Interbudgetary relations are based on the principles:

a) distribution and fixation of budget expenditures at certain levels of the budget system of the Russian Federation;

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

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

d) equalizing the levels of minimum budgetary provision of the constituent entities of the Russian Federation and municipalities;

e) 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 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. 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.

A unified methodology is used for calculating standards for financial costs for the provision of state and municipal services, standards for calculating financial assistance to territorial budgets, as well as a unified procedure for paying federal and regional taxes.

The goals of organizing a system of interbudgetary relations can be:

Equalization of budgetary security,

Stimulating the growth of tax potential,

Financial management of territorial development,

Reducing the risk of underfunding of key budget services at the local level.

The budget system of the Russian Federation has three levels: 1) federal budget; 2) regional budgets; 3) local budgets.

The basis of the regulatory and legislative framework regulating interbudgetary relations, namely, the processes of accumulation of financial resources in budgets, their distribution and redistribution, is the Tax Code of the Russian Federation (TC RF) and the Budget Code of the Russian Federation.

According to Art. 12 of the Tax Code of the Russian Federation, federal taxes and fees are taxes and fees that are established by the Tax Code of the Russian Federation and are obligatory for payment throughout the Russian Federation. The list of these taxes includes: VAT, excise taxes, corporate income tax, personal income tax, state duty, water tax, fee for the right to use wildlife and aquatic biological resources, unified social tax, mineral extraction tax, taxes provided for by special tax regimes.

Tax and non-tax revenues of the federal budget are regulated by Art. 50 and 51 BC of the Russian Federation.

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.

Funds transferred to the federal budget, the budget of a constituent entity of the Russian Federation, or the local budget as security for certain state powers are taken into account in the corresponding budget as income in the form of gratuitous transfers.

During the financial year, legislative (representative) and executive authorities, represented local self-government bodies do not have the right to make decisions leading to an increase in budget expenditures or a decrease (loss) in budget revenues at other levels of the budget system of the Russian Federation, without making changes and additions to the relevant laws ( decisions) on budgets that compensate for increased expenses and decreased (loss) of income.

The principle of equality of the budgets of the constituent entities of the Russian Federation in relations with the federal budget presupposes the establishment of uniform standards for deductions from federal taxes and fees to the budgets of the constituent entities of the Russian Federation for all constituent entities of the Russian Federation, a uniform procedure for the payment of federal taxes and fees. Standards for financial costs for the provision of public services, standards for minimum budgetary provision, which are the basis for calculating financial assistance to the constituent entities of the Russian Federation from the federal budget, are determined on the basis of a unified methodology, taking into account the socio-economic, geographical, climatic and other characteristics of the constituent entities of the Russian Federation and are agreed upon with the constituent entities of the Russian Federation until the adoption of the federal law on the federal budget for the next financial year.

Providing financial assistance from the federal budget to the budgets of constituent entities of the Russian Federation can be provided in the following forms:

1. providing subsidies to equalize the level of minimum budgetary provision of the constituent entities of the Russian Federation;

2. provision of subventions and subsidies to finance certain targeted expenses;

3. provision of budget loans;

4. provision of a budget loan to cover temporary cash gaps that arise during the execution of the budget of a constituent entity of the Russian Federation.

A subject of the Russian Federation that is a recipient of financial assistance from the federal budget to equalize the level of minimum budgetary provision does not have the right to:

1. place civil servants financed from the budget of a constituent entity of the Russian Federation in better conditions (wages, travel and other expenses) compared to civil servants of federal institutions (taking into account regional wage coefficients);

2. provide budget loans to legal entities in an amount exceeding 3 percent of the budget expenditures of a constituent entity of the Russian Federation;

3. provide state guarantees to the constituent entity of the Russian Federation in an amount exceeding 5 percent of the budget expenditures of the constituent entity of the Russian Federation.

A municipal entity that is a recipient of financial assistance from the budget of a constituent entity of the Russian Federation to equalize the level of minimum budgetary provision does not have the right to:

1. place municipal employees financed from the local budget in better conditions (wages, travel and other expenses) compared to civil servants of institutions of the constituent entities of the Russian Federation (taking into account regional wage coefficients);

2. provide budget loans to legal entities in an amount exceeding 3 percent of local budget expenditures;

3. provide municipal guarantees in an amount exceeding 5 percent of local budget expenditures.

Financial assistance from the federal budget to the budget of a constituent entity of the Russian Federation, provided to equalize the level of minimum budgetary provision, is determined on the basis of standards of financial costs for the provision of public services in order to finance expenses that ensure minimum state social standards.

Subventions and subsidies to the budgets of the constituent entities of the Russian Federation are provided to finance expenses of a targeted nature, namely:

1. expenses for federal target programs;

2. capital expenditures;

3. expenses transferred from the budgets of other levels of the budget system of the Russian Federation;

4. other targeted expenses.

Subjects of the Russian Federation have the right to attract targeted budget loans to finance cash gaps due to the seasonal nature of expenses or the seasonal nature of income receipts for a period of up to six months on reimbursable and gratuitous terms. The purposes of providing these loans, the terms of payment and repayment of targeted budget loans to constituent entities of the Russian Federation are determined by the federal law on the federal budget for the next financial year.

When a constituent entity of the Russian Federation receives financial assistance in an amount exceeding 50 percent of the expenditures of its consolidated budget, an audit of the budget of the constituent entity of the Russian Federation is mandatory.

The budget of a constituent entity of the Russian Federation can be audited by the control body of the Ministry of Finance, the Accounts Chamber of the Russian Federation.

Providing financial assistance from the budget of a constituent entity of the Russian Federation to the local budget can be provided in the following forms:

1. provision of financial assistance from the funds for financial support of municipalities of the constituent entities of the Russian Federation, formed in the budgets of the constituent entities of the Russian Federation, to equalize the level of minimum budgetary provision of municipalities in order to ensure financing of minimum state social standards, the responsibility for financing of which is assigned to local governments;

2. provision of subventions to finance certain targeted expenses;

3. other forms provided for by the budget legislation of the constituent entity of the Russian Federation.

An audit of the budget of a municipal entity can be carried out by the financial control body of the executive branch or the control body of a constituent entity of the Russian Federation. The conclusion of the control body of the subject of the Russian Federation is announced when the legislative (representative) body of the subject of the Russian Federation considers the draft budget of the subject of the Russian Federation.

The federal law on the federal budget may provide financial assistance to local budgets to finance targeted expenses provided for by federal target programs or federal laws.

State authorities of the Russian Federation have the right to exercise control over the expenditure of funds received by local budgets from the federal budget.

The formation of the budget of a closed administrative-territorial entity is carried out taking into account the following features:

1. all types of federal, regional and local taxes and other revenues accumulated on its territory are allocated in full to the budget revenues of a closed administrative-territorial entity;

2. if there is insufficient own and regulated income to the budget of a closed administrative-territorial entity, subsidies are allocated from the federal budget to finance expenses related to the functioning of local government bodies. The amount of these subsidies is approved by the federal law on the federal budget for the next financial year;

3. the excess of income over expenses of the budget of a closed administrative-territorial entity is not subject to withdrawal to the budgets of other levels of the budget system of the Russian Federation.

Local self-government bodies of a closed administrative-territorial entity do not have the right to terminate or change rates, as well as establish other types of benefits for taxes and fees administered by the federal government bodies of the constituent entities of the Russian Federation in accordance with the tax legislation of the Russian Federation and the tax legislation of the constituent entity of the Russian Federation Federation, on whose territory a closed administrative-territorial entity is located.

Economic analysis of the dynamics of modern interbudgetary relations.

To assess the effectiveness of interbudgetary relations, it is advisable to analyze the tax revenues of the federal and consolidated budgets, which are the most significant in terms of the volume of financial resources mobilized by the state.

It is noteworthy that consolidated budget revenues increased to a significantly lesser extent than federal budget revenues. Consequently, the tax efforts of the federal authorities are concentrated primarily on the redistribution of financial flows. At least three negative consequences follow from this: firstly, the tax burden on the economy increases, and secondly, the independence of regional authorities in determining tax budget priorities, the need for which follows from the essence of

federal state, thirdly, the efficiency of the budget system as a whole decreases, since the principle of efficiency presupposes the closest possible approach of budget revenues and expenses to the taxpayer and consumer of budget funds.

As a result, the proportions of distribution of income of regional and local budgets changed in favor of the regional ones.

The share of local budgets is systematically decreasing both in terms of income as a whole and for each tax group. Moreover, the decline is most characteristic of those tax groups that are important from the point of view of generating budget revenues. Moreover, there are no redistribution trends that could indicate that the federal and regional authorities have decided to generate revenues to rationally assign certain groups of taxes to local budgets; this is observed for all tax groups.

The redistribution mechanism of interbudgetary relations is not aimed at equalizing regional differences in terms of budgetary provision of the population, but at the centralization of budgetary resources, leading more likely to the passivity of regional authorities in the formation of revenue sources of budgets than to the implementation of the principle of social justice in the budgetary sphere.

Presentation on the topic "Interbudgetary relations" in economics in powerpoint format. The presentation for schoolchildren contains 39 slides, which discuss in detail the 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.

Fragments from the presentation

Interbudgetary relations- these 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.

Story:

The modern system of interbudgetary financial flows began to take shape in the Russian Federation starting in 1991.
By this time, before the formation of the independent Russian state, the budget system of the RSFSR was part of the centralized budget system of the Soviet Union.
Due to the absence of any uniform norms for securing revenue sources and spending powers, for each ATE there were individual proportions for the distribution of tax and non-tax revenues, from which pre-agreed expenses were financed.
The new Constitution of 1993 and the strengthening of the positions of federal authorities made it possible to carry out a reform of interbudgetary relations in 1994, the main goal of which was to formalize the issues of distribution of revenues between the federal and regional budgets and the provision of financial assistance to lower-level budgets
As a result of the reforms carried out, the system of federal financial support for regions currently includes several channels for providing financial resources, which can be divided into two groups:
- regular types of financial assistance;
- irregular types of financial assistance.
As part of regular financial assistance, it is necessary to highlight, first of all, transfers from the Federal Fund for Financial Support of Regions, subsidies to the budgets of closed ATOs, and subventions to the city of Moscow. Irregular financial assistance mainly includes expenses within the framework of various federal programs, as well as funding from ministries and departments.
The main channel of regularly provided federal financial assistance to the regions is the Regional Financial Support Fund, which, since 1994, has been formed and distributed in accordance with the following principles.
The value of the FFPR is approved in the form of a fixed share of tax revenues of the federal budget (in 1994 - 22% of VAT revenues, in 1995 - 27% of VAT revenues to the federal budget, in 1996-97 - 15% of tax revenues of the federal budget for excluding import duties...). Every year 70-80 subjects of the Federation out of 88 have the right to receive transfers from the FFPR.

The task of interbudgetary relations

Distribute expenses
Distribute income to the appropriate budget

The primary point in organizing the system of interbudgetary relations is the issue of distribution of expenditure obligations between levels of government.
Economic theory provides virtually no recommendations on the distribution of expenditure obligations.
It is assumed that a particular government service should be provided by the level of government that most closely represents the community of people that benefits from the provision of that service.
From this point of view, for example, it is justified to finance local goods from the municipal budget, and public services of national importance - such as defense, security - from the central budget. However, most public services do not fall completely into any of the listed categories and, therefore, it is not possible to resolve the issue of distribution of obligations for their financing according to theoretical considerations alone.

Components of an expenditure obligation

legislative regulation;
financing;
administration.

At the same time, regulation cannot be quantified, and financing and administration, although they can be quantified, do not reflect the full range of actions of the government to fulfill the expenditure obligation.

Approaches for assessing the expenditure needs of regional budgets

Indirect assessment of regional expenditure needs based on factor analysis.

Assessment of regional expenditure needs based on existing targeted transfers.

A similar approach is used when there is insufficient statistical information to analyze the influence of various factors on the amount of expenses, but at the same time, a certain number of targeted grants are allocated from the national budget. In this case, to calculate the transfer, the ratio of federal funds received in the region per capita and the national average grant size is determined, which is then used as one of the coefficients in the transfer distribution formula.
This approach has several advantages, the most important of which is that when applied, equalizing transfers can complement targeted transfers, and therefore, there are no conflicts between ministries and departments responsible for the distribution of targeted and equalizing transfers, and budgets at lower levels are not deprived of targeted sources of financing.

Application of a single standard of budget expenditures for all ATOs of the state.

To implement this approach in practice, it is necessary that there is no significant differentiation in the cost of providing public services between provinces.

Assessment of regional expenditure needs based on actual expenditures.

Obviously, this approach is not possible to use on a long-term basis, because Regional authorities have the opportunity to influence the amount of expenses in order to receive a larger transfer volume in the future.
It must be taken into account that the state always contains underdeveloped territories with low cost of public services due to:
with interregional price differentiation,
with the inability to provide certain types of services due to the lack of necessary infrastructure
any other reasons related to the level of economic development.

Revenues of territorial budgets include:

Own budget revenues – revenues fixed on a permanent basis in whole or in part
Regulatory revenues are federal and regional taxes and other payments for which deduction standards are established.

Regulating income is carried out to avoid vertical and horizontal imbalances.