PROBLEMS OF BALANCING LOCAL BUDGETS OF UKRAINE

Abstract

Theoretical and methodical approaches have been substantiated and recommendations for balancing local budgets in terms of financial decentralization have been formed. In particular, the main methods of balancing local budgets on the basis of revenues and expenditures are highlighted, the place of interbudget transfers in the formation of the revenue base of territorial units and the level of local budgets balancing in 2014-2018 are analyzed, as well as the main directions of improving the local budgets balancing in the context of increasing their own financial resources. It is determined that a balanced budget is a budget in which current period receipts correspond to the sum of expenditures in the same period, so balancing the budget is the most important stage in budgeting. Interbudget transfers should not serve as a major tool, but should only complement balancing methods. The calculations show that the budgetary reform of decentralization is going in the right direction, and the reformatting of the system of interbudget transfers in Ukraine in 2015 has already yielded positive results. However, not all problems are resolved yet: interbudget transfers remain the main and the most important tool for territorial development financial support. It is concluded that for better functioning of the system of tools and methods of local budgets balancing it is necessary to legislate stable norms of deductions on national taxes, to create transparent and objective procedure of transfers rendering.