Formation of Budget Proportions – the Dominant Regional Policy of Transfer Financing of Municipal Budgets

Relevances. Equalization of the budget provision of municipalities in the context of the use of transfer financing is an actual research direction in modern economic conditions.
Purpose. Research and analysis of budget proportions in the context of the regional practice of financial equalization of the budget provision of municipalities, justification of proposals to ensure the balance of their budgets.
Objectives: Develop proposals for achieving a balanced budget by revenue, taking into account the optimization of expenditures (for example, a city district); justify recommendations for the formation of a methodology with a two-stage algorithm for providing transfers in the form of subsidies to equalize the budget provision of municipalities.
Methodology: System, structural and dynamic analysis in the processes of studying the organization of interbudget relations, budget proportions and distribution of inter-budget transfers at the meso-level.
Results. Developed proposals to achieve a balanced budget income taking into account the optimization of costs (for example urban district), the formation of methodology a two-step algorithm provide transfers in the form of grants for leveling the budget supply to municipal formations.
Conclusions. The formation of a rational organization (structure) of inter-budgetary relations, based on compliance with the principle of subsidiarity, will expand the spending powers of local authorities, will ensure greater financial independence of municipalities through transfer financing of their budgets. However, the elimination of horizontal differences in municipal budgets and inequality in the budget provision of municipalities can be achieved only if the policy of local authorities is focused on optimizing fiscal proportions and ensuring budget balance.

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