Modeling perspective planning city budget (Donetsk case study)

Abstract

Perspective planning the city's budget, its revenue and expenditure parts, is one of the important activities of local authorities that are stated in the Budget Code of Ukraine. High-quality execution of this important function requires using modern scientific and analytical tools, the use of which will improve the quality of management of the socio-economic development of the city.This article proposes an improved information- analytical complex for long-term planning of the city budget, intended for scientific and informational support for decision-making. It consists of models for medium-term forecasting of Donetsk city budget revenues. This complex is a research tool that allows analyzing the socio-economic development of the city as well as its budget in retrospect, estimating planned tax revenues of the city in the medium term (next 3 years ) with a high degree of accuracy and adequacy to the actual real socio- economic processes.According to the forecasts of medium-term planning it was found that provided that in 2014-2016 Ukraine's GDP growth equals 2% annually and the real rate of price growth (GDP deflator) is 9% annually, tax revenues will grow from UAH 2.178 mln in 2012 to UAH 2.465 mln in 2016. This change will occur mainly due to the expected growth in personal income tax in the city budget from UAH 1.468 mln in 2012 to UAH 1.738 mln in 2016.Actualization of the complex allows getting updated forecasts of economic development and city budget revenues for the next three fiscal periods. The resulting forecast can be used for scientific substantiation of administrative decisions of city authorities and improving the quality of budget planning and forecasting.