Transcript Місцеве самоврядування міст України та

LOCAL SELF-GOVERNANCE
IN UKRAINE
2010-2012
1
Local Government Framework in Ukraine
Local communities have the right to independent resolution of issues of local
importance.
To exercise this right, they elect city mayors and city councils. The latter
establish their executive bodies.
The local government authority (proper) includes, in particular, ensuring
stable operation of life-sustaining systems in cities and their maintenance.
In addition to this, the law allows the state to delegate the authority to local
governments in such areas as public education, culture, health care, and social
protection.
Local governments use their local budget funds to exercise these types of
authority.
To exercise the local government authority proper, local budget receive
collections from local taxes ad fees.
The state ensures the implementation of the delegated authority through
assigning revenues from state taxes to local budgets, as well as through
transfers from the State Budget.
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Main achievements in the restoration of local
self-governance in Ukraine
Local self-governance in Ukraine has a 800-year long tradition. This
tradition was interrupted by the communist regime and was restored in
1990.
Since then, the country re-constructed the system of local government
bodies, and developed its legal foundations. The local government
framework has been specified in the Constitution of Ukraine.
In 1997, the Verkhovna Rada ratified the European Charter of Local
Self-Governance.
Local governments unite in local government associations, with the
Association of Ukrainian Cities being one of them. The status of local
government associations has been specified by a separate law.
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Key problem issues of cities
Insufficient resources of most of local government to adequately perform their
functions specified by the law remains the main problem.
Reasons:
1. Insufficient local budget resources proper, which did not exceed 8.7% of
the total revenues of local budgets.
2. Constant failure of the Government of Ukraine to comply with its
constitutional obligation to provide the complete financial support for the
implementation of the delegated authority. Over the last three years the
government of Ukraine performed this duty at about 80% at best.
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Current status and future of local government reform
Only the reform may ensure the adequate capacity of local governments.
Almost all experts agree on the necessity of such reform.
The reform implies the optimisation of budget expenditures through the
consolidation of the territorial foundation of local self-governance of
villages, towns and cities, as well as reducing the number of local
government bodies 8-10 times, and strengthening the financial foundations
of local budgets through the introduction of the comprehensive property tax.
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Implications of the consolidation of territorial
foundations of local self-governance
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Share of local budgets (LBs) in the Consolidated
Budget of Ukraine (CBU), %
60,0
46,2
50,3
40,0
36,2
39,5
30,0
24,6
25,6
3,3
3,2
50,0
45,5
44,6
32,7
32,5
21,7
20,7
3,5
3,3
20,0
10,0
0,0
2009
2010
2011
2012
Share of LBs in CBU
Share of LBs without subventions in CBU
Share of LBs without transfers in CBU
Share of LB own resources in CBU
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Failure of the state to provide the financial support for
the implementation of the delegated authority and
related consequences for local budgets
Financial support from the state for the
delegated authority, %
90
88.8
42.6
45
88
86
Share of local budget own funds channeled
to support the delegated authority, %
40
86
33.4
35
83.5
84
30
26.3
25.6
2009
2010
25
82
80
80
20
15
78
10
76
5
74
0
2009
2010
2011
2012
2011
2012
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Sources of funds to cover the shortfall for the
delegated authority
A total of 141.3 billion UAH needed to support the
implementation of the authority delegated by the
central government to local governments. The
shortfall constitutes 27.3 billion UAH
Projected by the Ministry of
Finance 01.01.2012
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1
Budget shortfall for delegated
authority and sources to cover it:
7.8
Atditional transfer during the year
Funds from Basket Two
27.3
Non-repaid mid-term loans.
December 01, 2012
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Optimisation
114
7.5
Accounts payable, December 01
2012
Потреба на делеговані
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The overall structure of local budget expenditures in
Ukraine, Slovakia and Poland in 2010, %
100%
6,7
15,5
17,9
80%
60%
52,9
84,6
55,5
40%
20%
0%
31,6
26,6
Slovakia
Poland
8,7
Ukraine
Own authority
Delegated authority
Staffing expenditures
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Central government blocks local government own funds
Starting with the 2nd half of 2012, in the context of severe State Budget
shortfalls, the State Treasury resorted to the unprecedented withholding of
funds local governments had on their accounts.
As of late December, about 4 billion UAH remained blocked and local
governments failed to pay their contractors for works and services already
provided.
Thus the central government managed to resolve its financial problems at the
expense of local budgets.
So far, a considerable part of these funds still remains blocked.
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Key problem issues in the Housing and Utilities Sector
Local governments in cities are responsible for housing maintenance, solid
waste management, centralized water and heat supply, and sewerage. The
sector has deteriorate due to lack of resources.
In 2004 the country approved the National Housing and Utilities reform Program,
however its implementation is undermined by the populist policy of the
government.
As of today, the tariffs set at the central level cover only about 70% of the
service cost.
The government is obliged to compensate local budgets their losses
associated with the low tariff and service cost, however it fails to do it in a timely
manner.
Therefore, the total debt of utility companies (first of all gas and electricity
debts) exceeds 17 billion UAH.
The compensation funds the Cabinet of Ministers does provide are being
distributed in a non-transparent manner and with the considerable regional
bias.
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Distribution of the State Budget subvention to local governments in regions
in June of 2012 to compensate the difference in tariffs
(UAH per capita in urban areas)
city of Kyiv
Donetsk oblast
Luhansk oblast
city of Sevastopol
Dnipropetrovsk oblast
Kharkiv oblast
Kirovohrad oblast
Poltava oblast
Crimea
Zhytomyr oblast
Kyiv oblast
Khmelnytskyi oblast
Vinnytsya oblast
Violyn oblast
Chernivtsi oblast
Cherkasy oblast
Lviv oblast
Rivne oblast
Chernihiv oblast
Odesa oblast
Sumy oblast
Ternopiol oblast
Zaporizzhya oblast
Kherson oblast
Mykolaiv oblast
Ivan-Frankivsk oblast
Zakarpattya oblast
0.00
1.76
0.68
0.60
0.56
0.53
0.48
0.40
0.38
0.36
0.34
0.32
0.31
0.29
0.28
0.25
0.25
0.24
0.23
0.23
0.22
0.19
0.19
0.17
0.16
0.15
0.13
0.10
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
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Centralization instead of decentralization
Over the last 3 years, the central government makes steps towards the
centralization of public authority. First of all, this policy affects local
governments whose authority is taken from the local level and transferred to
state administrations and ministries.
Examples:
1. Law “On Regulation of Urban Development Activities” approved in 2010,
whereby despite AUC protests local governments were stripped of their
influence on the development of populated areas.
2. Reforms in the medical system, whereby local governments are stripped of
their influence on the provision of in-patient medical assistance and
emergency assistance.
3. The right to inventory of real property has been taken from local
governments, although local government do need to keep it to perform the
taxation of real property.
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USAID DIALOGUE Project
A Ukraine-wide activity to provide a comprehensive support to local
governments across the country through:
- working with local government practitioners (Task Forces, AUC
Regional Offices),
- working with representatives of the central state executive,
- working with future local government lawyers, and
- working with the public at large.
Outcomes:
- Think tank capacity for policy development,
- Institutionalization of mechanisms for policy development and policy
dialogue,
- Specific results of policy dialogue.
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Relationships between the state executive
and local governments
The Tymoshenko Government introduced a practice for representatives of
local government associations to take part in the Cabinet of Ministers
sessions with the advisory vote. In 2010 this practice was suspended and
was resumed in November of 2012.
The Law of Ukraine “On Local Government Associations” envisions budget
consultations between the Cabinet of Ministers and local government
associations. In 2012, the Cabinet of Ministers violated this law and the State
Budget for 2013 was prepared and approved in a non-transparent way.
This law also envisions the concurrence of the associations with draft laws
related to local self-governance. The purpose of this move is to prevent the
approval of laws and regulatory documents harmful to local governments.
The trends in the number of documents submitted to AUC for its expert opinion
is shown on the next slide.
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Trends in the number of draft regulatory and
legal documents submitted by the central
state executive agencies to AUC for
concurrence
central agencies of the state executive
Ministry of Regional Development
80
70
60
50
40
30
20
10
0
2009
2010
2011
2012
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Selected improvements and successes over
last couple of years
At the national level these include:
1. Introduction of the local tax on real property.
2. Channeling 100% of land fee collections and collections from the
unified business tax to the development part of local budgets.
3. Simplified local borrowings.
4. Approval of the law on the delineation of boundaries between stateowned and communally-owned lands.
5. More transparent mechanism from allocation of funds for road
network maintenance.
6. Legislation to streamline land sales.
7. Law on administrative services.
8. Law on access to public information.
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Selected improvements and successes over
last couple of years
At the national level these include:
• Launching the School Bus Program in the Vinnytsya oblast: private bus
companies take children from rural communities to schools,
• Implementation of the Clean Potable Water Program in the Kirovohrad
oblast,
• Sewerage network improvements in 3 cities in the Lviv oblast,
• 110 km of rural roads laid in the Rivne oblast,
• Implementation of the oblast level investment promotion program in the
Zaporizzhya oblast,
• 1.2 million UAH added to the Together for the Future Program in the
Kharkiv oblast to finance small communities,
• An Open Government Center opened in the Dnipropetrovsk oblast to
consolidate services of 35 licensing and permit offices in the oblast,
• Financial support for the construction of 3 landfills in the Poltava oblast.
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Financial capacity of local governments in Ukraine
Expenditures for the implementation
of the local government authority
proper, $ per capita,
2011
2500
2000
1500
1000
500
0
2200
563
700
Lithuania
Poland
25
Ukraine
Sweden
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Immediate tasks to support local self-governance
1. Increasing the revenue part of local budgets to enable local
governments implement their own authority.
2. Calculation of transfers to local budgets for the implementation of the
delegated authority based on national standards.
3. Transparent distribution of subventions from the State Budget
between regions and communities.
4. Stop the practice of transferring the authority to resolve issues of
local importance to state executive agencies. Give the authority taken
from local governments back to them.
5. Departing from the national populist tariff policy and steps towards
real reforms in the housing and utilities sector.
6. Real delineation of boundaries between lands owned by
communities and by the state.
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