DYNAMICS OF REVENUES AND EXPENDITURES OF LOCAL BUDGETS IN UKRAINE

Abstract

This article provides a comprehensive analysis of the dynamics and structural transformations within Ukraine’s local budget revenues and expenditures for the period 2019–2025. It evaluates the impact of systemic crisis factors, specifically the COVID-19 pandemic and the full-scale armed aggression of the Russian Federation. Local budgets are analyzed as the foundational financial basis for local self-government and a vital tool for implementing socio-economic policy at the territorial community level. The research highlights the shift toward an adaptive-mobilization model under martial law, characterized by increased financial centralization and a reorientation of funding priorities.
The study evaluates revenue structures, distinguishing between stable tax sources and volatile non-tax revenues, capital transactions, and international transfers. It is argued that while tax revenues provide relative stability, other sources remain highly sensitive to macroeconomic and security conditions. Furthermore, the analysis of functional expenditures reveals a growing share of delegated mandates–such as education, healthcare, and public security – at the expense of local infrastructure and environmental development.
The findings confirm that the Ukrainian budget system has transitioned from financial decentralization to a centralized model focused on immediate state security needs, significantly reducing the budgetary autonomy of territorial communities. The study concludes with practical recommendations for optimizing inter-budgetary relations and formulating strategies for post-war regional recovery. Ultimately, enhancing the sustainability of the local finance system is positioned as a prerequisite for maintaining quality-of-life standards amidst prolonged crisis challenges.