THE SIGNIFICANCE OF LOCAL BUDGETS IN ENSURING REGIONAL DEVELOPMENT

Abstract

Financial decentralization made significant adjustments to the processes of development of the territories of Ukraine, creating conditions for expanding the fiscal space and powers of local self-government, achieving financial autonomy and stability of local budgets, transparency and efficiency of the use of their funds with an orientation to the needs of each community individually, which directly proportionally affected the growth and improvement of the stand- ard of living and well-being of the population of the regions. The peculiarities of the development of the territories of Ukraine under the conditions of financial decentralization demonstrated that when the reform was introduced, local communities faced significant financial, logistical, humanitarian and administrative problems. Most of them have a long-term nature, which negatively affects the full implementation of local decentralization and is a barrier to effective socio-economic development of the regions already in the long term. The large-scale destruction of infrastructure and shelling caused by the war, occupation, migration, reduction of economic activity and reduction of production, drop in business activity, anti-crisis measures of the government to reduce tax pressure significantly affected local budgets, especially in regions where active hostilities are taking place. In this regard, the study of local budgets of Ukraine and the analysis of the peculiarities of the formation of their incomes and expenses in the conditions of war is an extremely urgent issue that requires detailed study and is of great importance for solving the socio-economic problems of the country in wartime. The analysis of the revenues and expenditures of the local budgets of Ukraine during the war showed that, despite the fact that the beginning of the war undermined the financial and material basis of local self-government, communities in general proved that they are able to face any threats and challenges with dignity. However, despite the adaptation of local self-government to modern complex conditions and its support for the country's economy in general, there are a number of problems that may in the future affect the provision of fiscal independence and independence of local budgets and reduce the competitiveness of regions. To mitigate their impact, local authorities need to intensify cooperation with international partners (grants from international organizations or foreign governments for the implementation of certain projects) in order to obtain additional financial resources, and for the government, when calculating interbudgetary transfers, it is important to take into account that local budgets need to increase the amount of financial support or reduce spending powers.