Challenges and financial opportunities of the development of territorial communities in the conditions of war

Abstract

The article analyzes the main trends in the financial capacity of development of territorial communities under the influence of the war with Russia. The dynamics of own revenues of local budgets of territorial communities across the regions of Ukraine were analyzed, taking into account the inflation index, the rate of growth of personal income tax from the financial support of military personnel, local taxes, and interbudgetary transfers. New, war-induced, financial challenges to the development of territorial communities are highlighted, namely: unforeseeable and numerous changes in the legal field, which required LGUs to constantly monitor them and change current plans; strengthening of the asymmetry of the development of territorial communities and the dependence of the level of financial capacity of the territorial community on the presence of a registered military unit on its territory; a decrease in the revenue part of local budgets due to a decrease in the amount of local taxes, the largest fee for land, a single tax, etc.; organizational problems of local tax collection that arose during the war; a decrease in capital investments due to government-imposed restrictions on special fund expenditures, a decrease in transfers from the state budget to local budgets, in particular, the amount of educational subventions and the need to increase expenditures on general secondary education from the own revenues of local budgets of territorial communities, and others. At the same time, in the conditions of the war, the communities had new opportunities for local development, in particular, the budgets of the territorial communities were replenished at a faster rate due to income tax on the income of individuals (PIT) from the financial support of military personnel. The «big bonus» of the most financially capable communities was the reverse subsidy, which for the most part remained at the disposal of local self-government bodies, which in turn increased the asymmetry of the financial capacity of the development of territorial communities and developed undesirable effects of procrastination.