Regional budgets: who lives in Russia badly, and who does not

Victoria Pavlova

Novye Izvestia has found out which regions are the first in line for additional support, and where does all the money go from there?

Harder to spend than making money

Everyone is used to hearing from regional officials that there is a catastrophic lack of money for anything: neither for health care, nor for road repairs, nor for education. But the Ministry of Finance convinces of the opposite: there are no financial problems, there are more than enough funds. Only every fourth region of Russia will end up with a deficit in 2021. Yes, and here the Deputy Minister of Finance Leonid Gornin reassures: "We understand that this is such a technical, purely financial indicator". The monthly reports of the Ministry of Finance on the state of the consolidated budget of the constituent entities of the Russian Federation show that by the beginning of October 2021, the total surplus of all regional budgets amounted to 987 billion rubles. This is the maximum value for the last 10 years! The closest indicators are in 2011 - then in 9 months the regions received 831.6 billion rubles more than they spent. And only 6 regions out of 85 are included in the fourth quarter with a deficit. Last year there were 33 such regions. Surprisingly, spending money now turns out to be more difficult than getting it.

To understand which regions are bathed in money and which are forced to stand with an outstretched hand, Novye Izvestia turned to data from the Federal Treasury for 8 months of 2021.

The richest regions, which do not even have time to spend money, turned out to be not Moscow and St. Petersburg at all, but industrial centers in which metallurgy is concentrated, and agricultural regions. Even oil and gas is represented by only one Yamalo-Nenets Autonomous Okrug (the Tyumen region itself, without autonomous okrugs, specializes primarily in the manufacturing industry and oilfield services, but not in production). Potatoes and metal are the keys to success in 2021! The capitals look quite pale against this background: St. Petersburg took 15th place with a surplus of 15.4%, and Moscow was in 58th place, receiving 5.6% more money than it spent.

The main secret of the wealth of the regions is saving and keeping costs approximately at the same level. From this list, we can only single out the Krasnoyarsk Territory with the Kursk Region, which increased expenses compared to the same period last year by 10% and 13%, respectively, and the Sakhalin Region: Governor Valery Limarenko simply cut the regional expenses by 7%.

Regions with a deficit, on the contrary, do not hesitate to spend money: their expenses increased by 6% -13% on average, and the head of Sevastopol Dmitry Razvozzhaev increased the region's expenses by as much as 28%. This is the highest rate among all! The Amur Region under the leadership of Vasily Orlov is trying to get closer to him. But is the deficit caused by additional spending so bad? Is it worth it to waste away over gold, like Kashchei the Immortal?

What budgets are spent on

Budget expenses are not a trip to the supermarket, they are strictly planned. A distinctive feature of the plans for 2021 was an increase in expenditures under the item "National Economy". And this is not surprising. This article includes not only investments in various infrastructure megaprojects, but also support for entrepreneurship during lockdowns. There is no escaping the compensation due to business, so most regions have noticeably increased spending under the item "National Economy". The situation with health financing is much more interesting. The incidence breaks all past records, and in terms of mortality from covid, Russia even comes out on top in the world. In such a situation, money in medicine should flow like a river, but in reality the opposite is true. Only 38 constituent entities of the Russian Federation nominally increased funding for health care. According to the head of the department of state regulation of the economy of the RANEPA Vladimir Klimanov, there can be no unity in spending in principle:

- With the unity of social policy, with the unity of a number of requirements for the environment in which all this develops, nevertheless, the structure of the economy and the structure of the population by territories are very different, therefore, one can expect that the costs will be different.

At first glance, it is difficult to blame Dmitry Razvozzhaev for squandering, because the Sevastopol healthcare system received an additional 2.1 billion rubles. But how this money was spent is a big question. For example, patients with coronavirus sent for treatment to a hospital at the Izumrud boarding house complain about the lack of treatment, drugs, ventilators and a “diet” consisting exclusively of eggs and bread. Feldsher-midwife posts that are not closed for repairs face a shortage of feldshers and nurses.

But this is not the worst option yet. The authorities of the other 38 regions did not hesitate to cut medical expenses altogether.

So much for a rich capital. According to the results of 8 months of 2021, Sergei Sobyanin allocated 76.1 billion rubles less for medicine than in the same period last year. And the head of the Moscow region, Andrey Vorobyov, saved almost 13.9 billion rubles on doctors. Such is the optimization of healthcare: in January-September 2021 alone, the mortality rate in Moscow increased, according to the Mosgorstat, by 21.8%, and the natural decline more than doubled. Not everything is going smoothly in the Moscow region either - the mortality rate increased by 14.7%.

All additional funds in the metropolitan area went to support entrepreneurship. Expenditures under the item "National Economy" in Moscow increased by 132 billion rubles, or 27%, and in the Moscow region - by 25 billion rubles, or 43%. Those who survive will be fed, and those who do not survive will not need help. Such harsh laws of Sparta operate in Moscow.

Director of the Institute for Strategic Analysis and partner of FBK Igor Nikolayev believes that the reason for the massive cuts in healthcare costs in such a difficult time is premature euphoria:

- Here, the regions were let down by what, in general, we heard lately: we overcame the consequences of the pandemic, especially after the vaccination campaign began. They believed that all the worst was over. Such a signal went on at the federal level, the regions could not ignore this .

Economist, State Duma deputy Mikhail Delyagin focuses on the fact that such fragmentation of approaches to the distribution of finances is a feature of the existing system, very reminiscent of feudalism:

- Different priorities in the regional budgets are a manifestation of separatism, not federalism. When there is no uniform federal policy on what is important to us, then this is not federalism. Not to be confused with feudal fragmentation, which in our country is also intensified with this coronavirus. We live in conditions of feudal fragmentation, this is our model of government.

Where do the firewoods come from?

From the very beginning of the pandemic, you can regularly hear in the news that the government has decided to allocate additional funds for certain purposes. Last year, support for the regions really increased significantly. If since 2011, interbudgetary transfers in the amount of 1-1.3 trillion rubles in the first 9 months were the norm, then in 2020 they left 2.396 trillion rubles. But in 2021, the increase ranged from 2.1 to 2.346 trillion rubles.

So where did the firewood come from, then? From the people, apparently. Almost all regions this year have increased their own revenues through taxes, excise taxes and fines. The "People - New Oil" position is gaining momentum.

But all the successes in the growth of collected taxes should not be attributed to the Federal Tax Service. Their resources are not unlimited, too, explains Vladimir Klimanov :

- I will not say that the tax collection rate in recent years has been growing somehow rapidly, it is, of course, steadily increasing, but it has already reached some of its maximum ceiling. Now this parameter is no longer a characteristic of something, but the fact that taxation is increasing is also due to the economic recovery, which is happening faster than expected and predicted about a year ago.

Mikhail Delyagin has his own point of view on this issue.

- Firstly, the tax authorities began to work more efficiently, and secondly, last year many medium and small enterprises decided to come out of the shadows in order to get at least minimal, albeit insufficient, but state support, somewhere the enterprises will re-register from the same region in another.

The Governor of the Lipetsk Region Igor Artamonov must say thanks to global trends: the increased metal prices allowed the region's main enterprise, NLMK, to increase its IFRS net profit for 9 months of 2021 5.5 times to $ 3.8 billion. As a result, the regional budget revenues from taxes on profits and revenues increased by almost 2.2 times to 53.8 billion rubles.

At the same time, the governor of the Vologda Oblast Oleg Kuvshinnikov should be grateful to the current conjuncture, Igor Nikolayev notes.

- Of course, the rise in metal prices matters. As for the Vologda Oblast, I will assume that it is also timber, which has grown very much in price, and we have good export supplies. For each region, you can find those enterprises that are actually budget-forming and, thanks to the conjuncture, had very good financial performance, and this was reflected in the regional budgets.

Only the Sakhalin Oblast and Yugra, whose incomes fell by 5%, drop out of the general picture of total prosperity.

Not everyone gets richer

One gets the impression that a new economic miracle is taking place in Russia. Only people for some reason do not notice him. And, as Igor Nikolayev notes, they will not soon notice - everything is being eaten up by inflation. The numbers are increasing, but the quality of life is not.

- Have people started to live better - I would like to believe, but in fact it is inflation. The well-being of people must be judged by the dynamics of real disposable income, while real disposable income is calculated taking into account inflation, which, as you know, breaks all records. Yes, financial indicators, budgets are good, but in real terms, what kind of people have incomes is not at all the same. And these surpluses - in nominal terms, we are so beautiful. So in reality things are different.

Someone succeeds in earning money on their own, while someone pumps money from the budget. According to Igor Nikolayev, the distribution of subsidies under the existing budgetary system is the norm.

- The budget policy is structured in such a way that at first money accumulates in a significant amount in the federal center, up to 60-70%, and 30-40% remains in the regions, then, after the redistribution, it remains somewhere around 50-50, but this redistribution is like times is largely focused on ensuring budgetary equalization.

In general, the volume of interbudgetary transfers remained almost unchanged, however, in the regional context, there have been great changes.

The main beneficiary of the covid and the relying state support was the governor of the NAO Yury Bezdudny - an increase in transfers by 2.1 times to 7.5 billion rubles! Oil and gas can no longer cover all emerging needs ... In other regions, the increase in transfers is more or less within the bounds of decency.

Sakhalin's life is going into hibernation: revenues from Moscow are getting smaller, income taxes have fallen by 27%, and own revenues in general - by 5%. And only a 7% cut in expenses (medicine was cut by 4%) allowed Valery Limarenko to approach the fall with a surplus. But is this life if you cannot earn money, or get help from Moscow, or spend money for the benefit of the population?

There are always objective factors that affect the financial condition of the region. If, for example, oil becomes cheaper, then the collection of income tax for companies in oil-bearing regions will inevitably decrease. But in Russia, officials are afraid to let the situation take its course: everything rests on manual control. Vladimir Klimanov notes the role of a specific person in solving financial issues:

- As for the specific efforts of the governors, recently there has been a trend towards using more manual management methods than formalized ones in terms of the distribution of intergovernmental transfers, and this is evident from the fact that in less than 2 years the Prime Minister made more than 30 trips to the regions , and as a result of each trip, additional amounts of funding arose, going to the regions he visited, related to the solution of some specific issues of a social or investment nature.

Crimea looks amazing, being one of the regions with the greatest losses of subsidies. Especially against the background of Sevastopol from the neighboring top. But experts give an explanation for this state of affairs. According to Igor Nikolayev, it's all about the high base effect.

- As far as Crimea is concerned, it may be a base effect. They invested a lot in previous years, a lot of money. Crimea is still a priority, of course.

And Mikhail Delyagin sees the reasons in the weakness and shortsightedness of the Crimean leadership:

- What Crimea has lost - firstly, it may be the bad lobbying of Mr. Aksenov, because a lot of investors have tried to enter Crimea over the past 7 years, and some of these investors have a tougher attitude towards the Crimean authorities than Ukrainian ones.

The regions have money, but this does not mean that it will make life easier for people. Part of the money is eaten up by crazy inflation, and part of it remains dead weight. As independent analyst Dmitry Milin noted in a recent article by Novye Izvestia: "The bureaucrat will not be punished for not achieving the expected results, but punished for not following instructions ." Therefore, it is more profitable for governors to report on the achievement of a budget surplus on paper than on any specific actions that improve people's lives. Therefore, there are still no fewer residents with leaky pockets in the richer regions of the country.