Financial stability of local budgets in crisis periods: problems and solutions

Abstract

Purpose: to assess the degree of growth of threats to the public sector, with an emphasis on their impact on the financial stability of local budgets, to consider the feasibility of using a set of budgetary and financial instruments by municipal authorities to counteract budgetary risks growing in crisis conditions.Methods: the study is based on the use of a systematic approach, general scientific methods, including analysis, synthesis, comparison, as well as the use of methods of economic and statistical analysis and processing of analytical data, analogies and scientific generalizations, a tabular way of visualizing research results.Results: the analysis and assessment of the factors of influence made it possible to substantiate the expediency of using by the budgets of the Moscow Region of a set of budgetary, financial, tax and other management tools that ensure an increase in the efficiency of budgetary impact on socio-economic processes during the period of crisis. Growing budget risks associated to a greater extent with the uncertainty and unforeseen economic situation and affecting the financial stability of local budgets are identified. The methodology for assessing the depth of the crisis state of budgets and determining the pace of a possible recovery of the economy of the municipal sector based on optimizing the indicators of budget revenues and expenditures, which helps to increasing financial stability, is proposed.Conclusions and Relevance: the approbation of the methodology for assessing the financial stability of local budgets in times of crisis has shown that administrations can more quickly and adequately respond to ongoing changes, find optimal, often non-standard ways to solve problems and reduce negative consequences, taking into account the fullest possible implementation of the functions provided for by the current legislature. The proposed approach creates an opportunity for building new systemic mechanisms for the interaction of municipal government bodies and other economic entities on a mutually beneficial basis. In the context of increasing budget tension, this enables the authorities to act proactively and quickly minimize threats to ensuring the sustainability of budgets, which is especially important for maintaining socio-economic territorial stability in this crisis period.

Keywords

• local budgets
• financial stability
• threats
• factors of influence
• instruments
• efficiency of the budgetary mechanism