On the second day of the Russian investment forum, February 28, Prime Minister Dmitry Medvedev has gathered the heads of Russian regions to assess the effectiveness of government action in the sphere of interbudgetary relations
The Prime Minister acknowledged that the situation with the regional budgets remains intense, particularly in terms of debt load.
“Strictly speaking, the situation remains difficult. There are a number of positive changes, but such changes, in my opinion, should be more. Last year, the deficit of regional budgets has decreased almost an order of magnitude, from 170 billion to 12.5 billion rubles Reduced the number of problem regions, where public debt exceeds income. But the overall debt burden remains very large, the share of market borrowings in the total regional debt is still more than half”, – said Dmitry Medvedev.
Positive trends noted by the Minister of Finance Anton Siluanov. In his opinion, the improvement is due to the onset of the agreements between the government and the regions on limiting costs and improving efficiency, mobilizing revenue. “The first months of the current month suggests that the budgets of the regions continues to grow quite rapidly. Total tax and non-tax revenues of regional budgets increased by more than 20%”, – said Siluanov.
The Prime Minister also said that in large measure the expense of regions governed by Federal laws and regulations. “In health care, education, social support, employment, transport, housing and communal services in the total expenditure commitments of the regional authorities and according to the Ministry of Finance is about 10 trillion rubles, the share of regulated powers greater than 95%,” – said the Prime Minister. Anton Siluanov said that in education thus controls about 80% of expenditures of the budgets of the region in health care — 98% of expenses are governed from the Federal government.
Dmitry Medvedev also reminded that many regions are still very dependent on the Federal budget, “including the objective reasons”. Therefore, the government had extended its support to help the poorest, increasing to 100 billion rubles, the volume of grants for leveling the budget supply and bringing the total volume of these subsidies up to 600 billion rubles Cabinet Also plans to continue to issue budget loans, in 2017 for this purpose is planned 200 billion rubles.
The Prime Minister recalled that he changed the order of transfer of losses between tax periods for the purposes of calculating income tax. The government hopes that through this measure the incomes of the regions will increase by 160 billion rubles. Another 25 billion roubles should bring an increase of 10% of the standard enrollment revenue from excise duty on spirits.
Another measure which aims to support regional budgets, enrollment growth in profit of the part regions listed in the Federal budget. Later on the sidelines of the forum, Deputy Prime Minister Dmitry Kozak told journalists that the proposal was not finally executed and is now in a government Directive. Its meaning is that of the Federal income tax (3%) to return to the region of the funds is equal to the increase in the tax for the last fiscal year. According to Kozak, it is expected that this increase will be calculated based on the average of the previous two years.
The heads of regions proposed for equalization of regional budgets to raise the rate of enrolment in them of revenues from excise duties on tobacco, said following the meeting, Dmitry Kozak. Now Russia sold two times more cigarettes than manufactured, and the regions thus will be interested in “whitewashing” of this market, he explained. “No final decision, it will be worked on. We need to understand who will benefit, who will lose, how will this affect the Federal budget”, – said Kozak.
Anton Siluanov, in turn, stressed that the measures taken by the government to balance the budget relations are already yielding results: the results of two months of 2017 80 are regions with a significant excess of income compared to the previous year.
The Finance Minister also outlined the ways in which heads of regions have to work hard to improve the financial position. For economic growth and attracting investments, we need to have a balanced budget with realistic income and expenses. For noncompliance with the projections laid down in the budgets, the regions will reduce the transfer from the center to the “symbolic interest”, the Minister warned. According to him, in 2016 unrealistic income figures was planned in 20 regions.
Work on the agreements on subsidies allowed to increase the predictability of transfers, said Anton Siluanov. Some regions this year and had refused Federal subsidies, they will be directed to the Reserve Fund or distributed among other regions.
Next year the Ministry plans to develop a unified approach to the definition of the limit level of co-financing of regional budgets. According to Siluanov, the Ministry already has proposals on the methodology. In particular, it is proposed to provide regions with the budget sufficiency level is less than one, the share of Federal co-financing at 95% -70%, and for regions with an index greater than one is at 70% -5%.