To determine how the new economic reality affected the execution of the revenue side of the budget, how receipts from individual taxes changed, and how the authorities altered financing of the expenditure side, one can compare the execution of line items of the Nizhny Novgorod Region's consolidated budget for the 8 months of 2015 with execution for the corresponding period of the pre-crisis year 2014. Below are the figures for the main receipts and main expenditures of the budget.
An important figure to keep in mind when reviewing the budget and to refer back to when comparing budget indicators. According to the Central Bank, consumer inflation in August of the current year was 15.8 % compared to the corresponding period of the previous year.
Execution of revenue for January-August, as growth/decline rates against the corresponding period of the previous year
Total budget revenue - 105.44%, of which:
TAX AND NON-TAX REVENUE - 104.54%
NON-REPAYABLE RECEIPTS - 110.83%.
Execution of TAX AND NON-TAX REVENUE (as growth/decline rates against the corresponding period of the previous year):
- Corporate profit tax – 119.28% The expected and projected growth in corporate profit is linked to the devaluation of the ruble, the increase in wholesale prices for enterprises' products, and anti-crisis savings programs, including the freezing of wages at the region's enterprises and organizations.
Thus the net financial result (profit minus loss) — the final financial result of all organizations in the region for January-June 2015 — amounted to 149.6 percent of January-June 2015 [year-on-year].
By type of economic activity, the following can be noted for this indicator: Growth in Agriculture of 121.2 %, Manufacturing of 165.9%. A decline in Construction and Wholesale and retail trade by a factor of 4.7.
- Personal income tax - 101.88%. This figure is directly linked to the freezing of wages at the region's enterprises and organizations. Thus the average nominal accrued wage of those employed in January-July 2015, compared to the corresponding period of the previous year, grew by 3.9%, below official inflation; it was also mainly affected by an insignificant change in the growth rate of the region's accrued wage fund, which for January-July came to 103.8 percent relative to 2014.
- TAXES ON GOODS (Excise duties) - 95.40% (a downward trend in this indicator can be noted) The decline in household income and living standards has been reflected in the volume of goods sold. Thus retail trade turnover for January-August 2015 amounted to 401.0 billion rubles, or 86.1 percent of the level for the corresponding period of 2014 in comparable prices. Wholesale trade turnover in January-August 2015 for the Nizhny Novgorod Region was recorded at 458.9 billion rubles, which in physical volume amounted to 84.6 percent of the level for the corresponding period of 2014. The decline in consumption in the Nizhny Novgorod Region is steeper than in the Russian Federation as a whole.
Dynamics of this retail trade turnover indicator by quarter: - 1st quarter 86.5 % (in the RF - 93.6%) - 2nd quarter 85.6% (in the RF - 90.6%) Overall for the half-year, 86% (in the RF - 92.0%).
Since the start of the year I have consistently drawn attention to the dynamics of the average wage, real household income, and of course retail trade and services turnover. Only positive dynamics in these indicators can secure economic growth and a way out of the crisis.
- TAXES ON AGGREGATE INCOME increased to 107.53% The increase was achieved through growth in receipts from the tax under the simplified taxation system and the single tax on imputed income.
- PROPERTY TAXES - 106.91% The increase was achieved through growth in receipts from the property tax on individuals and the property tax on organizations. It should be noted that from 2015 companies on the simplified system lost the exemption that allowed them not to pay property tax.
Execution of expenditures for the 8 months of the current year, as growth/decline rates against the corresponding period of the previous year, broken down by expenditure classification sections.
Total budget expenditure - 104.51%.
NATIONAL GOVERNANCE MATTERS - 116.29%
including:
- Functioning of the region's highest official - 119.78%
- Functioning of legislative bodies of state power - 102.05%
- Functioning of the highest executive bodies of state power - 103.32%
- Other national governance matters - 131.77%
NATIONAL ECONOMY - 108.11%
Major expenditures only:
- Agriculture and fishery – 68.66%
- Transport - 150.96%
- Road infrastructure (road funds) - 129.76%
Funding outsiders by rate of decline/increase.
To assess real expenditures, let me note again that consumer inflation in July was 15.8 % compared to the corresponding period of the previous year:
- HOUSING AND UTILITIES - 96.56%
- EDUCATION – 100.63%
- CULTURE, CINEMATOGRAPHY - 96.40%
- HEALTHCARE - 96.66%, including Outpatient care - 89.18% and so-called Other healthcare matters 93.72% (for reference, these "other" expenditures make up more than half of all HEALTHCARE spending)
Although budget revenue grew, and the "experts'" fears voiced last year about declining tax receipts did not materialize, the policy of cutting social spending laid down last autumn persists. Lawmakers continue to look for budgetary salvation in cutting social spending. Only the growth rate for NATIONAL GOVERNANCE MATTERS outpaces the consumer inflation that has taken shape. To put it in poster language: "Deputy, by cutting social spending you're pouring water on the crisis's mill."
Mass media - 101.26%.
The topic of spending budget funds on propaganda has come up more than once. Across the Russian Federation as a whole, 33 billion rubles a year is spent on it from the regional budgets. Of that 33 billion, 449 million is "ours," Nizhny Novgorod's. Incidentally, spending in the region is above the average across RF regions.
A fresh example: the head of Komi with a rating of 79%. And now nothing but bewildered questions. About investment, about social spending. Propaganda ………. miracle-working.
Planning and execution of the consolidated budget as of 01.09, in figures.
Revenue
Plan - 154,624.41 million rubles (revised upward: as of 01.08 the planned figure was 151,074.68 million rubles.) Actual executed - 98,715.92 million rubles. Actual revenue received: 63.8% of the plan.
Expenditure
Plan - 175,001.18 million rubles (revised upward: as of 01.08 the planned figure was 174,447.90 million rubles.) Actual executed - 106,227.75 million rubles. Actual spending: 60.7% of the plan.
Deficit
Plan - 18,659.44 million rubles (revised downward: as of 01.08 the planned figure was 20,904.32 million rubles.) Actual deficit formed - 7,511.83 million rubles.
STATE AND MUNICIPAL debt of the region.
Every year since 2009 the region has been increasing its state debt to cover the planned budget deficit. The Nizhny Novgorod Region's debt as of January 1 stood at 66.1 billion rubles. With a planned deficit of 18,659.44 million rubles, if it is covered through borrowing, the region's state debt will reach approximately 84 billion rubles by the end of the year.
Debt servicing costs will also rise, including due to increased interest rates on newly concluded loan agreements; thus the amount currently planned for DEBT SERVICING for the year, 7,156.29 million rubles, will most likely be revised upward.
Data sources:
- Central Bank of Russia
- Rosstat.
How Folk Heroes describe such situations
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— Dad, what's a budget sequestration? — That, son, is when they increase spending on whips and cut spending on treats. | 
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