Page 56 - RusRPTNov18

Regional budgets would, by definition, increase spending and therefore the political authority of local and regional governments. But it's likely that the deputies involved are pushing their own agendas, since the proposal would create a new pot of money with little direction.
The combination of political anxiety in Moscow and the influx of oil revenues have reopened a policy fight over whether or not to issue loans to regional governments from the centre and, more generally, over regional budgetary autonomy, which is normally a talking point used by MinFin and Siluanov to increase their power over spending.
● A report from the Audit Chamber found that long-term spending made up just 12.3% of regional budgets in 2017.
● Local budgets are primarily funded through personal income tax. The Duma committee proposed raising money for the development budgets by raising regional governments' share of corporate income tax, although it is unclear if this would pay for the entire program.
● There is already a federal development fund. Unlike the proposed local funds, it is not a separate budgetary institution, so it draws from the same pot of money as the rest of the federal budget.
● One analyst quoted by RBK argued that mandating development budgets would interfere with local governments' ability to set priorities. Local governments would be forced to shift resources from higher priorities, like paying for schools and utilities, in order to fulfill the requirements of the development budget program.
56 RUSSIA Country Report November 2018 www.intellinews.com