Debt sustainability of the regional budgets is an important component of overall fiscal sustainability and one of the key characteristics of budgetary security of territories. Sustainable growth of debt load of constituent entities, which in 2015 exceeded 2.5 trillion rubles in absolute terms and 1/3 of tax and non-tax revenues of territories in relative terms, was caused by chronic imbalance of regional budgets in the post-crisis period in 2008. This resulted in the fact that constituent entities spend almost 30% of costs on Debt servicing and repayment, underfinancing other objects of expenditure. Moreover, there is a gap in the legislative framework and the methodology for the issues of debt sustainability of regional budgets due to the absence of clear actualization of this category in legal documents and lack of methodological tools for assessing its level which leads to incorrect results, which hampers the timely development of necessary remedial measures of the territory’s debt policy. The paper presents methodological tools for assessing debt sustainability of budgets of constituent entities, which eliminate the disadvantages of the methodologies used by the Ministry of Finance. The testing results have demonstrated the deterioration of debt sustainability of regional budgets. By the end of 2015, 22 constituent entities joined the group of regions with low debt sustainability (in 2014, this group included only 15 regions). To restrain further debt load growth of the territories the author offers a number of measures affecting both regional and federal authorities. Official data of the Federal Treasury of the Russian Federation, the Federal Tax Service, scientific research institutions, summary and reference data, regulatory documents, works of leading domestic and foreign researchers in the sphere of budget sustainability budgets, budget analysis, resources of the ConsultantPlus legal reference system became the informational base for the research. The methodological base includes universal scientific research methods of analysis and synthesis, elements of systematic and functional approaches, tabular and graphical data visualization
Keywords
assessment methodology, debt sustainability, regional and local budgets