Financial Support of The Decentralization Process in Ukraine

Abstract

The paper substantiates the financial support of the decentralization process in Ukraine. The necessity of reforming the existing system of financial support of the decentralization process has been proved. The main tasks of public authorities of Ukraine in the conditions of decentralization have been determined. The purpose of the article is to substantiate financial support areas for the decentralization process in Ukraine. The study's methodological basis is the Ministry of Finance of Ukraine's data, the Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine. It has been proved that Ukraine's united territorial communities' (UTC) financial resources are formed by 90.0% due to tax revenues. It has been proposed to expand the list of non-tax revenues for UTC budgets at the expense of other resources to stabilize UTC development's financial support. It has been proved that the growth rates of expenditures in local budgets of Ukraine in 2018 – 2019 were higher than the growth rates of revenues, which led to a deficit. It has been substantiated that a significant differentiation in revenues and expenditures by UTC groups indicates economic inequality in the development of UTC territories and resource provision, which is reflected in the amount and quality of public services received by residents in the respective UTCs. It has been determined that in order to intensify the process of financial incentives for sustainable development of territorial communities, it is necessary to ensure effective communication between executive authorities and local governments, organizational and methodological assistance to local governments, dissemination of information on successful practices of cooperation projects, European experience of UTC financial resources in EU countries for Ukraine. It has been proposed to ensure local authorities' financial autonomy and stability by transferring powerful sources of budget revenues, previously assigned to the central government, and the expansion of the financial base of administrative-territorial formations.