The real fiscal autonomy of Ukrainian regions remains insufficient even after the 2015 reform of inter-budget relations, and this is again evidenced by the budget for 2020. This was stated by OPPOSITION PLATFORM – FOR LIFE MP Serhiy Lovochkin.
“Despite the much-trumpeted reforms, the regions remain unable to reach the fiscal autonomy level of 2013. Six years ago, the relative share of local budgets’ incomes without transfers was 23.4 percent of consolidated budget, and this year it has reached only 21.4 percent. The situation might have aggravated next year if the parliament hadn’t stopped the government’s plans to transfer some local incomes to the national budget. But the regions are seeing no improvements, and this means the real decentralization reform is still to be implemented,” Lovochkin said.
The politician said the share of local budget income in consolidated budget could have been higher if not for an income redistribution between local and state budgets. The share of income tax, 25 percent of which is transferred to central budget, has been higher in recent years than income that had been transferred as a compensation during the inter-budget relations reform in 2015 and following years.
At the same time, the MP says, the central government regularly fails to provide funding for powers it delegated to the regions. According to Ukrainian Cities Association, the education subvention fell short of planned amount of funding by 10 percent (7bln hryvnia) in 2019, and healthcare subvention for same year has been lowered by 36.9bln hryvnia, which is 68 percent of the financial need.
“The total amount of underfinanced expenses that had been ‘relocated’ to local budgets recently is over 50bln hryvnia. The budget-2020 evidenced that the problems will remain. Therefore, OPPOSITION PLATFORM – FOR LIFE will initiate a real decentralization reform providing that all regions gain income that will help them grow,” Lovochkin said.Follow @serhiylovochkin