Lalita Isakhanyan

2210

THE BUDGET OF THE ORENBURG REGION FROM 2014 TO 2017

Recently, the importance of regional and local budgets has increased, and the
scope of their application has expanded in connection with the expansion of the
rights of regional and local authorities.

A system of regional budgets establishes a connection between legal entities and

individuals, between state, joint-stock, private and other forms of property as a
result of the seizure of income and their redistribution.

The budget of each subject of the Russian Federation has its own characteristics.
The structure and size of expenditures is determined by a variety of reasons: the
level of economic development, its sectoral structure, natural and demographic
features, forecast rates of development and development of territories, etc.

The main functions of the regional budget include:

1. creation of conditions for raising the level and quality of life of the population
of the region;

2. the development of business activity in the region by directing regional

investments controlled by administrations to the “points of growth” of the
regional economic complex through the regional development budget or through
direct public investments;

3. alignment of the conditions of entrepreneurship in the territorial

transformations of the region through the development of industrial, social and
market infrastructures.

The regional budget and the body of municipalities located on its territory
constitute the consolidated budget of the subject of the Russian Federation.

Regional budgets are divided into the current budget and development budget.
The current budget shows the income and expenses that provide the necessary
activities. The implementation of the principle of economic independence of the
region significantly increases the importance of the regional budget:

1. Is the main basis for financing the development of the social sphere and
infrastructure of the territories;
2. Budget revenues are dependent on the efficiency of economic activities in the
region;

3. The regional authorities have the tools of economic impact on the business
activity of the region. The development budget of the region is necessary to
maintain priority investment projects, to finance socio-economic activities.

Budget analysis should be conducted separately by income and expenditure.

For budget analysis you can use:

- horizontal analysis, during which current indicators of the budget are compared
with indicators for the last period;

- vertical analysis, which results in determining the structure of the budget, the
share of individual budget indicators in the final indicator and their impact on the
overall results;

We will conduct a horizontal analysis of the revenue and expenditure side of the
budget of the Orenburg region in terms of tax and non-tax revenues, mln.
Income item
2014 г. 2015 г. 2016 г. 2017 г.

Revenues - total
73889,0 75179,6 76725,6 77327,3

1. Tax revenues, incl.

52302,6 55638,7 58913,4 60223,8

Corporate Profit Tax

17774,5 19884,9 21674,2 22197,0

Tax on personal income

17985,7 18118,5 18886,1 18954,3

Excise taxes
4477,0 4547,7 4756,3 5133,8

Single tax levied in connection with the application

of the simplified taxation system 1748,4 1740,8 1752,1 1757,6

Single tax on imputed income for certain types of

activities 1204,5 1212,7 1235,8 1247,2

Single agricultural tax

77,7 85,2 86,5 88,3

Property taxes
5767,3 5834,8 5938,2 6054,2
Mineral Extraction Tax
683,2 712,9 752,8 781,3

Other taxes, fees and charges including:

2585,0 3501,2 3831,4 4010,1

Transport tax
859.1 1029,4 1289,9 1352,3

Land tax
1270,3 1993,2 2053,9 2165,4

National tax
455,6 478,6 487,6 492,4

2. Non-tax revenues, including:

10710,2 9216,6 7693,0 6557,3

Income in the form of profit attributable to shares in

the authorized capital 184.5 195,7 193,6 193,9

Interest received from the provision of budget loans

20,1 29,2 19,8 20,5

Payments from state and municipal unitary

enterprises 135,4 144,5 114,5 115,6

Other income from the use of property

190,4 190,6 180,8 207,3

Payments when using natural resources

120,1 151,5 125,4 145,8

Revenues from the provision of paid services and

reimbursement of state expenses 88,4 87,6 81,5 96,8

Revenues from the sale of tangible and intangible

assets 516,3 558,2 512,2 625,4

Administrative fees
228.3 254,4 231,2 243,5

Other non-tax revenues

816,5 851,6 687,7 727,4

Penalties
457,6 498,7 506,4 559,7

Income from business and other income-generating

activities 7952,5 6254,6 5039,9 5621,4

3. Gratuitous transfers
10876,4 10324,3 10119,2 8546,2
The table shows that the main part of the budget revenue potential is formed
from tax revenues. Tax revenues in the structure of budget revenues in 2014
amounted to 70.8%, 2015 accounted for 74%, in 2016 76.8% and in 2017
amounted to 77.9%. Tax revenues in 2017 increased compared to 2014 by 6.1%.

In this group, there is an increase in income in almost all items:

corporate income tax by an average of 9.3%;

personal income tax by an average of 9.8%;

transport tax on average by 8.45;

property tax of 9.7%

In the group of non-tax revenues, a decrease is observed in the article - gratuitous

transfers, as well as in business income. For the rest of the articles, the growth
dynamics, although not large, is observed. For example, payments for natural
resources from 2014 to 2017 increased by 25.7 million rubles, while income from
the sale of assets during this period increased by 109.1 million rubles.
Item of expenditure 2014 г. 2015 г. 2016 г. 2017 г.

National issues 1654,2 1729,6 1644,0 2103,1

National defense 48,7 51,7 50,0 49,1

National Security and Law Enforcement 254,1 287,5 248,0 307,5

National economy 13267,3 14657,0 13760,6 13871,9

Department of Housing and Utilities 3451,7 3457,4 3501,0 2343,9

Environmental protection 157,3 198,4 194,1 178,3

Education 16327,7 16892,9 16720,3 17481,2

Culture and Cinematography 612,6 960,2 644,9 626,4

Health care 14747,8 14617,1 6621,8 5796,5

Social politics 13864,2 13978,4 24623,7 25087,8

physical Culture and sport 921,5 1201,2 847,5 511,5

Media 85,4 100,7 84,1 34,4

Servicing public and municipal debt 1631,7 1845,9 1572,8 2617,9

Intergovernmental transfers 6933,3 5267,0 6274,2 5127,7

Conditionally approved expenses 1242,8

Total expenses 73951,5 75245,0 76787,0 77380,0

The table shows that in 2017 compared to 2014, expenditures increased by 9.5%,
this was due to an increase in spending on the national economy, education, and
social policy. Expenditures on Physical Education and Sports and the media have
decreased.

Significant changes in health care indicators — a decrease of more than 50%; and
Social policy — an increase of more than 55% due to changes. Since 2016, the
cost of insurance premiums for non-working health insurance is included in the
Social Policy section.

Comparing the revenue and expenditure parts of the budget, we get the following
indicators.

The budget deficit in 2014 - 62.5 million rubles, in 2015 - 65.4 million rubles, in
2016 - 61.4 million rubles, in 2017 - 52.7 million rubles.

Sources of financing the budget deficit are:

1. Securities (2017 - 1919.3 million rubles);

2. Loans from credit organizations (2017- (-1800) million rubles);

3. Budget loans (2017- (-546.7) million rubles);

4. Other sources (2017 - 480.1 million rubles).

The main ways to optimize sources of financing the budget deficit

- annual analysis of the volume and composition of debt, the development and
application of a mechanism for assessing the effectiveness of borrowing;

- reduction of the volume of attraction of short-term borrowed funds for a period

of less than one year, their attraction only to support current liquidity;

- more actively use government securities as sources of long-term financing of the

budget deficit, which have a number of advantages not characteristic of
commercial bank loans: the possibility of attracting more “long-term” money, the
absence of dependence on one lender, loans repaying in installments during the
circulation period, and not at the same time on the maturity date, they also allow
forming more flexible repayment schedules of obligations and are an additional
tool for regulating the volume of expenses no debt;

- to implement the adoption of new expenditure commitments to implement only

in the amount of the difference between the volume of existing obligations and
budget revenues and sources of financing the budget deficit for the planning
period;

- take measures to maintain the level of public debt and the cost of its
maintenance at a safe level

So, the government of the Orenburg region should strive to minimize the deficit
and maximize the balance of the budget, striving for the goal: to achieve a deficit-
free budget by 2020.