At the session of the Vitebsk Regional Council of Deputies, preliminary results of the outgoing year were summarized and the budget for 2022 was approved
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— Inna Vladimirovna, what are the preliminary results of the region's budget execution in 2021?
— There are all prerequisites for fulfilling the budget of the Vitebsk region for 2021 in compliance with the established parameters. When refining the republican budget at the end of the current year, we expect to receive certain financial support that will help complete the balancing of revenues and expenditures, taking into account the actual development needs of the region.
The budget is always closely linked to the processes occurring both in the region and the country, as well as in the world. Moreover, life constantly presents new challenges, sometimes quite extraordinary. Their solution is not easy. Despite certain difficulties, in 2021, it was possible to additionally support the region's healthcare, the agro-industrial complex, and local road management. Additional tax revenues, reserve funds of local budgets, and funds from the republican treasury were directed to these purposes.
Surplus revenues from personal income tax, profit tax, VAT, and payments from small and medium-sized businesses became significant support in the execution of the current year's budget.
Over the year, own revenues will increase by 130 million rubles compared to the plan; they are fully involved in the budget process. Revenue growth reserves include payments from the lease of communal property, as well as a number of other non-tax revenues.
The controllability and, consequently, the completeness of the receipt of such payments have increased over the last two years as a result of assigning revenue administration bodies to them.
— What is the situation with budget expenditures?
— The budget is always focused on balance, on matching expenditures with the volume of revenues that can be expected. The fulfillment of the state's basic social obligations remains a priority. To this end, the volume of resources for labor remuneration in the public sector, social payments to the population, the purchase of medicines and medical devices, the payment of utility services by budgetary organizations, subsidies to transport organizations, housing and communal services, and enterprises supplying the population with solid fuels, and others are fixed and unchangeable in the economic structure of budget expenditures.
The overall structure of the regional budget remains unchanged and implies the priority financing of the social sphere. Despite external challenges and internal problems, a significant part of the budget (almost 70%) is allocated to expenditures in the fields of healthcare, education, culture, physical culture, and social policy. In addition, a certain volume of state support (up to 13% of the budget) was provided to sectors of the national economy – agriculture, transport, and road management.
Vitebsk region is constantly developing. A number of investment projects are implemented annually in the region: reconstruction and construction of hospitals, schools and kindergartens, and infrastructure facilities. At the same time, it is not possible to significantly increase the volume of capital investments, as we rely more on the financial resources of the local budget for their development. Borrowed funds, if provided for these purposes, are in most cases on a repayable and paid basis. The real way to increase investment is to improve the financial capabilities of organizations in the region and build up the budget's own potential.
— One of the pressing issues is housing provision for citizens. What does the budget offer to support citizens in this matter?
— Those in need of housing can count on assistance in several areas. Subsidies are provided for the repayment of the principal debt and the reduction of interest rates on bank loans obtained for the construction or reconstruction of residential premises on commercial terms. Financial assistance in repaying commercial loans is provided to young and large families. Budget payments based on nominal privatization checks "Housing" will continue. In 2021, the volume of housing support increased by 50%, and in 2022, it will increase by another 40% to reach 56.5 million rubles.
Non-cash housing subsidies are provided from the budget to socially vulnerable population groups for partial payment of the cost of housing and communal services.
— What are the directions for increasing the efficiency of budget expenditures? What helps to save state resources?
— For the budget, the principle of efficient use of funds means achieving set goals with a minimum volume of resources, while guaranteeing the preservation of the quality of budget services. Such approaches are applied both during budget compilation and during its execution.
The main tool in this aspect is the program-targeted method of budget planning, when expenses are maximally distributed among the activities of state programs. The obvious advantages of this approach are that budget resources are tied to specific state functions, are transparent, and are highly controllable.
Already today, 93% of the expenditures of local budgets of the Vitebsk region are financed within the framework of state programs.
The efficiency of budget expenditures is also promoted by the implemented standardization of the cost of budget services per consumer and the gradual abandonment of itemized maintenance of staff and property of budget organizations.
Effective resource allocation helps to solve the tasks of their economical spending. Here, the professionalism and responsibility of the recipients of budget funds come to the forefront, and compliance with public procurement procedures is of great importance.
Effective off-budget activities contribute to reducing the burden on the budget. In the pre-pandemic year of 2019, income-generating activities replaced 6.5% of the expenditures of budget organizations. This year, it was possible to restore the total volume of "off-budget" social sphere sectors in absolute terms, but its share in budget expenditures has so far only been achieved in education.
Off-budget activities should be adapted to modern conditions, and the range of paid services can be updated and expanded taking into account new opportunities. Only in this way can this source of resources become the basis for strengthening the material and technical base of social sphere institutions.
— Was it possible to reduce the budget's accounts payable?
— The amount of accounts payable of the regional budget is not critical for the budget's sustainability and amounts to 33.5 million rubles. Despite the increase in expenditures, its volume was reduced by 4 million rubles compared to the beginning of the year, including the overdue consolidated budget debt decreased by almost half.
I would like to note that the debt for medicines and medical supplies has been reduced by 39%, for food products – by 28%, for utility payments – by 1.5 times.
— What are the main features, in your assessment, of the consolidated budget of the Vitebsk region for 2022?
— The main goals of the budget policy for 2022 are to maintain social stability and the achieved level of social protection for the population. No radical structural changes in budget expenditures are planned.
The implementation of state policy aimed at increasing the wages of employees in the public sector will continue. Factors for wage growth will include an increase in the basic rate by an average of 7% and the amount of the health improvement allowance, as well as the establishment of additional industry-specific incentive bonuses for certain categories of employees. If necessary, an additional opportunity to use the state head's reserve fund for these purposes is provided.
Budget revenues are projected at 3 billion rubles, of which 62% are own revenues. To form a strong revenue base, they should increase by at least 7% compared to the 2021 level.
There is an important innovation in the draft law on the republican budget for 2022: local government bodies are granted the right to make decisions on increasing the standard profit tax rate (currently 18%) within two percentage points. If such decisions are made, additional funds will be directed towards the construction of engineering and transport infrastructure, and the construction, reconstruction, and repair of local roads.
The consolidated budget of the region for 2022 is formed with a surplus of revenues over expenditures in the amount of 100 million rubles. This allows for the fulfillment of the obligations of the region's local government bodies to repay borrowed funds, including the return of budget loans to the republican budget, the redemption of bonds, and the fulfillment of guarantees on bank loans.
The budget balancing has been carried out taking into account the unconditional fulfillment by taxpayers of their tax obligations, the timely and full return by organizations of borrowed budget funds received, and the restoration of guarantees executed at the expense of the budget.
An important factor for the socio-economic well-being of the Vitebsk region is ensuring economic growth by enterprises and organizations. The additional revenues generated for the budget will be directed towards the further development of the region and improving the quality of life for its people.
Taking this opportunity, I would like to express my sincere gratitude to my fellow financiers in the region for our fruitful joint work, to extend warm words of thanks to the veterans of the financial system, and to congratulate everyone on the upcoming professional holiday – Banking and Financial Worker Day, which will be celebrated on January 2.