Haste in the vil­lage

The amal­ga­ma­tion of ter­ri­to­rial com­mu­ni­ties has been chaotic. This may lead to un­equal fund­ing, abil­i­ties to sup­port them­selves and im­pact on lo­cal res­i­dents

The Ukrainian Week - - FOCUS - Olek­sandr Kra­mar

The del­e­ga­tion of ad­di­tional fi­nan­cial re­sources and pow­ers from the cen­ter down is one of the key re­forms af­ter the Maidan. The Cabi­net of Min­is­ters ap­proved the Con­cept of Lo­cal Self-Gov­er­nance and Ter­ri­to­rial Or­ga­ni­za­tion of Gov­er­nance back in April 2014. In late De­cem­ber 2014, the Rada passed amend­ments to the Bud­get and Tax Codes. This in­creased the sources of rev­enues for lo­cal bud­gets as some of the fund­ing was passed to them from the cen­tral bud­get. A new ex­cise duty on sales to fi­nal con­sumers was in­tro­duced. The tax base ex­panded to in­clude real es­tate tax. Self-gov­ern­ing au­thor­i­ties got more con­trol over lo­cal taxes, in­clud­ing the power to de­ter­mine tax rates and priv­i­leges. New sub­ven­tions from the cen­tral bud­get were in­tro­duced to help ed­u­ca­tion and health care sys­tems per­form their new func­tions. A leg­isla­tive mech­a­nism was de­signed in 2015 to make co­op­er­a­tion of ter­ri­to­rial com­mu­ni­ties hor­i­zon­tal: nearly 400 of those have al­ready signed deals on cross-com­mu­nity co­op­er­a­tion in var­i­ous fields rang­ing from road re­pair and trans­port main­te­nance to ed­u­ca­tion, health care and fire se­cu­rity ser­vices.

Mean­while, a sharp rise in lo­cal bud­get rev­enues of the first two years of decentralisation has slowed in 2017. In 2015-2016, lo­cal com­mu­ni­ties saw a 42-49% in­crease in their own rev­enues com­pared to the pre­vi­ous year. In 2017, the ex­pected rise is a mere 16%, which is slightly over the cur­rent in­fla­tion rate. In the past years, the most at­ten­tion has been fo­cused on the cre­ation of amal­ga­mated ter­ri­to­rial com­mu­ni­ties and pri­or­ity fund­ing for them.


The mech­a­nism for com­mu­nity amal­ga­ma­tion was de­signed in 2015. It en­abled them to switch to di­rect work with the cen­tral bud­get, elim­i­nat­ing in­ter­me­di­ary lev­els, such as oblast or county, and thus al­low­ing them to re­ceive funds for in­fra­struc­ture di­rectly. A num­ber of pow­ers were del­e­gated to the merged com­mu­ni­ties from the county ad­min­is­tra­tion level: they will now pro­vide so­cial as­sis­tance, ad­min­is­tra­tive ser­vices, run schools and kinder­gartens, or­ga­nize the work of pri­mary health care fa­cil­i­ties, as well as cul­ture and sports fa­cil­i­ties. This brings along sub­ven­tions for ed­u­ca­tion, health care and in­fra­struc­ture devel­op­ment from the cen­tral bud­get.

As a re­sult, 794 old vil­lage and town coun­cils that cov­ered 2,015 set­tle­ments merged vol­un­tar­ily into 159 amal­ga­mated ter­ri­to­rial com­mu­ni­ties (ATC) as soon as 2015. The ini­tial process was the most dy­namic in Ternopil and Kh­mel­nyt­sky Oblasts in West­ern Ukraine where 26 and 22 ATCs emerged in 2015, merg­ing 673 set­tle­ments out of the 2,015 that year. Else­where, how­ever, a few or no new ATCs were cre­ated. As of the early 2016, ATCs cov­ered more than 5% res­i­dents in four re­gions only, and more than 5% of the ter­ri­tory in ten re­gions.

That year, the pace of amal­ga­ma­tion ac­cel­er­ated, tak­ing the num­ber 159 to 366, and dou­bling the pop­u­la­tion cov­ered to over 3.1 mil­lion. For now, these ATCs num­ber at 1,740 or nearly 15% of for­mer town and vil­lage coun­cils. The ge­og­ra­phy has changed too: Zhy­to­myr, Dnipro, Vin­nyt­sia and Za­por­izhzhia oblasts have the lead now, while the pace of merg­ers in the two above­men­tioned oblasts has slowed down.

Over­all, as of April 2017, Ukraine has 413 ATCs where elec­tions of lo­cal self-gov­ern­ing au­thor­i­ties have al­ready taken place, most re­cently on April 30 in 47 of those. Ac­cord­ing to the Min­istry of Re­gional Devel­op­ment, an­other 102 po­ten­tial ATCs are fi­nal­iz­ing their merger.

On March 14, 2017, Pres­i­dent Poroshenko signed Law No5520 “On de­tails of vol­un­tary amal­ga­ma­tion of ter­ri­to­rial com­mu­ni­ties in cross-county ter­ri­to­ries”. It will al­low a num­ber of ATCs to hold the first elec­tions and speed up the cre­ation of new ones.

Fi­nan­cially, the key dif­fer­ence be­tween the ATCs and old un­merged vil­lage and town coun­cils is as fol­lows: ATCs pool the rev­enues and ex-

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