MODERN TOOLS FOR MANAGING LOCAL BUDGETS IN THE CONTEXT OF DECENTRALISATION

Abstract

The crisis in Ukraine's economy requires the government to take significant transformation steps. The issue of decentralization of state powers in favor of local self-government as a basis for the transition to a new administrative-territorial system remains relevant. After all, the current assistance from partner countries to rebuild infrastructure and provide social guarantees does not cover the needs of local governments. Today, the budgets of hromadas, which are formed in accordance with the basic principles of the Concept of Reforming Local Self-Government and Territorial Organization of Power in Ukraine, demonstrate an increase in revenue sources, but these resources are not enough to restore the country's economy. The purpose of the article is to highlight the results of decentralisation in Ukraine; to identify the impact of structural changes in the national economy on the financial capacity of local self-government bodies. Methodology. To achieve this goal, the article uses the structural method, comparative analysis of empirical data, and abstract and logical generalisation. Results. The paper examines the current realities of filling the budgets of hromadas. It finds that, despite the hostilities and the consequences of the coronavirus crisis, some local budgets in 2022-2023 were executed with a surplus. However, one of the factors behind this situation is the increase in "military" income tax revenues, which has significantly strengthened local budgets, but at the same time led to the misuse of funds. At the same time, there was an increase in capital expenditure in local budgets. Subsidies for education and health care, basic, additional and other budgeted transfers were transferred from the state budget to the budgets of local governments. However, the study points out the imperfection of the current equalisation system, which requires the construction of an optimal calculation model. Practical implications. As a basis, it is proposed to use the practice of the leading countries of the world, which is to increase the interest of local authorities in independently searching for additional sources of budget revenues and to reduce the pressure from the government to withdraw funds. Value/originality. Increasing their own revenues, which do not depend on the government's policy on the distribution of national taxes and fees, will allow hromadas to plan expenditures on priority areas regardless of changes at the political level.