The draft state budget for 2018, registered by the Cabinet in the Verkhovna Rada, poses threats to fiscal and financial decentralization. “Instead of adhering to the policy of further decentralization of powers and money, the government is taking away to the central level what has been earned by cities, villages, united territorial communities,” emphasizes Samopomich MP Tetiana Ostrikova.
She explains, “Firstly, the draft budget proposes to shift the financing of benefits for housing and communal services to local budgets. In addition, the amendments to the Budget Code contain a proposal from the government to transfer the responsibility to pay off debts for housing and communal services accumulated over previous years to the local budgets. This will additionally burden them by 7 billion hryvnias.
Secondly, it is proposed to transfer the funding for higher education institutions of I-II level of accreditation: technical schools, colleges, and specialized schools. The Ministry of Finance promised that the transfer would take place exclusively at the regional level, but the draft law only mentions local budgets.”
Roman Semenukha, Samopomich deputy also adds that the draft budget does not provide for compensation to transport companies for the transportation of preferential categories of citizens.
In addition to this, according to him, the state provided subventions for education and medicine only by about a third: “We are offered to raise teachers’ salaries by 25%. At the same time, the subvention allocated for this increase only covers 16.5%.”
If the budget-2018 is adopted with such indicators, next year the Kharkiv city budget will have to cover the deficit of educational and medical subventions in the amount of 900 million hryvnias, Lviv – 358 million hryvnias, and the Dnipro budget – 250 million hryvnias. “The strength of the state is in strong communities. Local budgets should grow, not decrease,” sums up Roman Semenukha.