ADMINISTRATIVE-TERRITORIAL REFORM IN UKRAINE: IS THERE REAL SUCCESS IN THE FINANCIAL ACTIVITY OF THE TERRITORIAL COMMUNITIES?

Abstract

The article analyzes the dynamics of formation of the united territorial communities, identifies problems that partially hinder the processes of decentralization in Ukraine. Despite the steady increase in the number of territorial communities, they are found to cover only about 40% of the country’s territory with 23,8% of the state’s population. There are no united territorial communities in 88 administrative districts at all. The share of territorial communities formed around the cities of regional significance is very low. In Ukraine significant regional disparities persist both in the size of newly created territorial communities and in the levels of their financial autonomy. There is a high proportion of sparsely populated (up to 5 thousand people) communities. With the total growth of own income of the united territorial communities in 2015– 2018 2,5 times, income per capita – 2,1 times, only 25% of communities are financially autonomous. The state continues to provide newly created territorial communities with financial assistance through the State Regional Development Fund and infrastructure development subsidies.

It is proved that the indicators used by the central authorities to monitor the decentralization process only partially reflect the effectiveness of the formation and activity of the united territorial communities. Based on the use of correlation analysis, it is proved that the growth of own income of the united territorial communities is determined not by the results of their economic activity, but by the regulatory measures of the state. It was defined that the increase of own income of the united territorial communities was due to the growth of the minimum and average wages in the country, the rise of the price on agricultural lands and excise duties on tobacco, fuel and alcohol. Dependence of the united territorial communities' own incomes on wage growth and excise goods value is 96-98%. The prospects of further growth of the united territorial communities’ own income as a result of legislative changes in the field of taxation of land and rent for its use are revealed. A number of indicators are proposed that can be used to objectively estimate the economic and financial performance of the united territorial communities.