SOURCES OF ENSURING THE FINANCIAL INDEPENDENCE OF LOCAL GOVERNMENT

Abstract

Financial independence of local governments characterizes the independence of the state as a whole, the level of democratic rights and freedoms of citizens, the potential of its economic development. However, today the financial basis of local self-government has a number of problems. In particular, local budgets have become significantly dependent on the central government, which determines the norms of deductions from regulatory taxes and the amount of grants and subventions from the State Budget of Ukraine; the composition of local budget revenues and budget regulation mechanisms change annually. All this raises the problem of finding additional sources of income to ensure the financial independence of local governments, the study of which is a popular area among academia. The foundation for the active development of the territorial community is a sufficient amount of financial resources, their independent disposal and full financial independence. Therefore, in Ukraine, the resources that form the local budget and are the basis for the independence of local self-government are enshrined in law. However, in the Ukrainian realities, local budgets do not have enough own revenues to effectively implement the tasks and functions of local self-government, so the state provides financial support through intergovernmental transfers. Therefore, the prerequisite for financial independence is reasonable, in terms of economic feasibility, decentralization of power and adequate distribution of powers, responsibilities and financial and economic base between the center and local governments. The article proves the need for a thorough analysis of the revenue base of local budgets in order to determine the degree of financial independence of local governments. Analysis of the city budget of the city of Kryvyi Rih showed that the city government is not financially independent of the center. This is evidenced by the following: high share of official transfers in total budget revenues; the predominance in the structure of tax revenues of national taxes in the part assigned to the local budget, and the complete absence of local fees; relatively the total share of local taxes.