The main problem of local government is the lack of financial support

The President of the Association of Siberian and Far East cities, mayor of Novosibirsk Vladimir Gorodetsky gave a speech “On the current situation in local government of Russia and aims of the Association of Siberian and Far East cities” at the meeting of the Association.

“The government system is going through serious changes, and we can not stay away from them too - said Gorodetsky. - The President declared the prospect of transferring more powers to local authorities. We should discuss what will be the volume of these powers, what will be the economic and financial basis for their implementation”.

The mayor of Novosibirsk pointed out the positive changes that have recently taken place in the financial capacity of municipalities. “We have no problems with paying salaries, utility bills etc. Due to the implementation of prioritized national projects many issues concerning education, health, roads, demolition of dilapidated housing have been solved”.

Gorodetsky talked about the problem of instability of municipal legislative framework. 131-Federal Law which regulates the activities of local governments as well as fiscal, tax, building and housing codes is constantly being changed. Moreover, these changes do not always accord with each other, and municipalities have to live and work in these circumstances. The total number of questions supervised by local government has increased by more than 2 times since 2003. But no unified approach to the composition of state powers transferred to the local level has been developed. The main problem of local government is the lack of financial support. This problem mainly concerns under-populated cities and rural areas. The deficit of the municipal budget is covered by subsidies from the budgets of the higher level. At the same time local governments have no incentives to develop their own tax bases, since most of their taxes go to the federal budget.

Vladimir Gorodetsky pointed out another problem. Local governments are excessively controlled by public prosecutions department and other regulatory authorities. “During the election campaign Vladimir Putin mentioned a conceptually new approach to the development of local government, - said Vladimir Gorodetsky. – It can stop financial dependence of municipalities on the “handouts from the top”.

The President of the Association proposed to send a number of initiatives to the federal authorities. More specifically, he proposed to send all taxes from local businesses to the level of municipalities and reduce the number of unnecessary inspections of municipalities. A tax on real estate should become an important source of refilling of local budgets. It was also proposed to abolish the federal tax deduction on land, and amend the budget code in order to establish unitary requirements for the formation of budgets of municipalities.

In addition, members of the Association proposed to develop and adopt a concept of development of municipalities, take the powers which are assigned to regional and local levels of government to the table, adopt the Federal Law that would establish the status of the center of the subject of the federation and develop financial base of municipalities through personal income taxes and a number of issues concerning land ownership.

18.05.2012

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