{"id":1107,"date":"2026-02-24T15:11:38","date_gmt":"2026-02-24T14:11:38","guid":{"rendered":"https:\/\/www.noyardstick.com\/?p=1107"},"modified":"2026-02-27T19:03:51","modified_gmt":"2026-02-27T18:03:51","slug":"on-regional-budgets-veteran-reintegration-and-others","status":"publish","type":"post","link":"https:\/\/www.noyardstick.com\/?p=1107","title":{"rendered":"On regional budgets, veteran reintegration and others"},"content":{"rendered":"\n

What does a bit more granular look at regional deficits from preliminary electronic budget data tell us about fiscal risks in 2026? What can we glean from the first year of the regional equivalents of the “Time of Heroes” training program for returning war participants? More on these and on an assortment of other recent regional news below.<\/strong><\/p>\n\n\n\n\n\n\n\n

More on regional budgets<\/strong><\/p>\n\n\n\n

[UPDATE: this post was revised on February 27 using the Treasury\u2019s more granular data]<\/p>\n\n\n\n

Regional spending and income figures were released for 2025<\/a> in February by Russia\u2019s Treasury (figures are slightly different from the ones in the Electronic Budget<\/a> due to the Treasury\u2019s more precise breakdown). The Finance Ministry also released<\/a> aggregate figures for consolidated regional budgets (these include municipal finances and extrabudgetary funds). On both counts, the situation looks much worse than it was originally expected. Consolidated regional budgets accumulated a total deficit of 1.5 trillion rubles, five times as much as in 2024. 2025 was also notable because consolidated regional finances were already in the red in the first half of the year \u2013 usually this is not the case. Janis Kluge, an analyst focusing on Russia\u2019s budgetary framework (whose Substack is a great follow<\/a>), noted that even correcting for gross regional product, regions had not had deficits this size since 2013.<\/p>\n\n\n\n

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The negative trajectory of the past years, as regional expenditures grew as federal transfers stalled and corporate taxes dwindled, is clear. The war is an obvious source of pressure. In 2025 social expenditures, which represent the highest proportion of region\u2019s war-related spending, rose by almost 20% in regional budgets, while regions’ own incomes rose by less than 5%, well below inflation. Rising recruitment bonuses<\/a> and hidden war-related expenditures (such as employment support for war participants or reconstruction contributions) are more difficult to quantify precisely, but these also continue weigh down regional budgets.<\/p>\n\n\n\n

In August regions outside of Moscow had accumulated<\/a> 1.9 trillion rubles on unused funds on their accounts, but these funds were unevenly distributed. Many regions that did have liquidity reserves opted instead to finance their deficits through market loans, or deferred investment-related expenditures in the expectation that the federal government\u2019s debt forgiveness program would free up funds in their budget. Several regions were already struggling<\/a> with growing expenditures in the second half of 2024 and had to make cuts to core budget items. The Kemerovo Region, an extreme example because of the ongoing crisis of the coal industry, recently started cutting aid<\/a> to war participants. Public sector workers in the region have also complained<\/a> of salary arrears (as did public employees in some other Siberian and Far Eastern regions struggling with liquidity issues, e.g. firefighters in the Transbaikal Territory and medical workers in Khakassia).<\/p>\n\n\n\n

Looking at just the regional budgets, for which there is a breakdown, the worst indicators belong to regions whose key industries<\/a> have been in protracted crises<\/a>, among them the Vologda, Kemerovo, Arkhangelsk and Murmansk Regions, but also some of Russia\u2019s oil and gas producing regions (e.g. the Komi Republic or the Yamal-Nenets Autonomous District) which had been doing relatively well so far.<\/p>\n\n\n\n

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Poorer regions that are normally heavily subsidized by the federal government and whose main source of income is, on the whole, stable, will find the turbulence of economic slowdown easier to weather than regions that face a sudden collapse of their own revenues (e.g. due to industrial decline) and have very little accumulated reserves (e.g. Kemerovo, Vologda, Irkutsk, Murmansk or Arkhangelsk). Those with a large proportion of poor citizens and soldiers relative to their population, and high associated social expenditures are also in the danger zone.<\/p>\n\n\n\n

To an extent, the Kremlin is relying on governors to manage the resulting political risks from as little money as possible (while acting as political shields) and on quasi-state actors such as big corporations and civil society to pitch in and complement the effort. This approach has more or less worked so far, but as the Kremlin is reluctant to provide more substantial aid to crisis-ridden industries and regional budgets, some may feel incentivized to co-opt and use, rather than suppress, dissatisfaction over liquidity issues.<\/p>\n\n\n\n

Spreading<\/strong> the costs of the \u201cnew elite\u201d<\/strong><\/p>\n\n\n\n

Since early 2024 when Putin announced that war participants would be turned into Russia\u2019s new elite, the main vehicles<\/a> at the federal level have been the \u201cTime of Heroes\u201d training program, which has provided training in public administration for a small number of handpicked war participants, and the United Russia party, which was tasked with fielding former war participants as electoral candidates, which the party has done in increasing (though still low) numbers, in spite of resistance from the established elites in its regional branches. An interesting innovation<\/a> in this latter field is a bill that would make it possible for war participants to file their candidacy documentation via representatives, perhaps in the hope that regions would hit quotas without actually needing to integrate soldiers into the local elite.<\/p>\n\n\n\n

Last year, instructed by the federal government, regions have also started<\/a> their equivalent of \u201cTime of Heroes\u201d to prepare, typically, 30-60 war participants for managerial positions, depending on their population size. These programs share several similarities with the federal program. Most of them offer standardized courses in partnership with the regional branches of the Presidential Academy of National Economy and Public Administration (RANEPA), albeit some regions (e.g. Arkhangelsk, Nizhny Novgorod and Ulyanovsk) partner with local universities, which might offer better prices than RANEPA\u2019s that can come out to double-digit millions in a mid-sized region, based on the university\u2019s price list<\/a>. The selection process, consisting of written tests, face-to-face interviews and extensive vetting for character traits and war trauma, is similar. The modules<\/a>, both in the federal<\/a> and the regional<\/a> programs, are reminiscent to earlier cadre training programs such as the \u201cSchool of Governors\u201d and the \u201cSchool of Mayors\u201d, and include a lot of corporate-style team building; lastly, the declared goal of the regional programs, like that of the original federal one, is to prepare returning war participants for civilian jobs.<\/p>\n\n\n\n

The regional programs themselves represent a very limited track of advancement. In their first year, out of some 46,000 applications (this is the official total, which is very close to my count), based on publicly available data some 3,500 people were accepted in Russia\u2019s regions and the occupied Crimea, with at least a further 900-1,000 (and likely more) in reserve, but with several people sent back to the frontline after being accepted for training. As of February 2026, only a couple of dozens of graduates have been appointed to various positions in a handful of regions, with many training programs still ongoing. Those who do not get jobs immediately are added to a \u201ccadre reserve\u201d for later appointments.<\/p>\n\n\n\n

But looking at these programs is important not because they are going to soak up most returning war participants, but because they provide an insight into what networks regions are going to rely on to handle returning veterans. Regions already use a combination of measures including social support, employment quotas, business incubators and other measures, and are actively trying to involve funds outside of their own budgets.   <\/p>\n\n\n\n

Appointment patterns are similar to the ones observed in the case of the federal program. Positions are scarce, often have to do with the war or veteran care itself, and are created specifically for program alumni to fill, e.g. deputy officials responsible for security<\/a>, public associations<\/a>, \u201cSpecial Military Operation<\/a>\u201d support or patriotic education. These positions, of course, create a small, but additional strain on regional and municipal budgets that need to finance them. Other types of appointments do exist, but are rarer, e.g. war participants appointed to head districts<\/a> in the Vologda Region, whose governor, Georgy Filimonov, is one of the most visible full-throated domestic supporters of the war.  <\/p>\n\n\n\n

Even with numbers this limited, the regional programs cast a significantly wider net than the federal program, which, though with notable exceptions, has mostly elevated career public servants and soldiers. This is deliberate: as of 2026, an increasing number of regional training programs are<\/a> accepting<\/a> people<\/a> with secondary vocational education, without a university degree. But, apart from some exceptions, it also seems much likelier that the alumni graduating from these programs will be channeled into private enterprises and municipal positions with little power rather than the regional elite.<\/p>\n\n\n\n

From scattered regional press releases we know that regions accept people from outside of their territory into their training programs, thus they could in theory draw people to wealthier and more industrialized regions. This appears to have happened in some cases (the Moscow Region and the Krasnodar Territory), but typically the vast majority of applicants are regions\u2019 own residents. Indeed, the correlation between a region\u2019s confirmed losses (as per latest numbers published<\/a> by BBC and Mediazona) and the number of applicants is almost as strong as it is between the regional population and the number of applicants (all while population is not a strong explainer of war losses \u2013 as a recently published study<\/a> in The Bell showed, soldiers are disproportionately recruited from regions where the percentage of residents living under the poverty threshold is high).<\/p>\n\n\n\n

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The \u201cmentorship\u201d element of regional training programs is one way, in which extrabudgetary organizations are involved. In several regions, major industrial firms participate in the programs as the goal is to integrate war participants into the regions\u2019 leading industries. For example, the general director of the Magnitogorsk Iron and Steel Works (MMK) serves<\/a> as a mentor in Chelyabinsk\u2019s \u201cHeroes of the Southern Urals\u201d; local industrial directors act as mentors<\/a> in the programs of the Novosibirsk and Sverdlovsk Regions. The \u201cHeroes of Tuva\u201d program partners<\/a> with firms in the mining, energy and utilities sectors to hire alumni; Tatarstan offers<\/a> a 100,000-ruble bonus for the successful employment of a program graduate at one of the regional enterprises where participants study corporate processes (including in the Alabuga defense industry center and the tech incubator Innopolis) etc. Regions such as Vologda, Penza, and the Moscow Region announced hiring quotas. Companies with a specific number of employees are required to reserve at least 1% of their staff positions for veterans. Larger state-owned corporations have their own training programs, which they coordinate with regional authorities.<\/p>\n\n\n\n

Companies are thus asked to provide training and jobs, and are sometimes, to some extent, compensated, but the extent of this is unclear, and with it, so are the cost-benefit calculations. There surely are non-pecuniary benefits. Employing one or two decorated veterans could be a badge of honor that helps relations with the government. But this might look like a worse deal if the implication is that the regional authorities, responsible for veterans\u2019 employment and satisfaction, expect firms to maintain that hiring pipeline when tens of thousands more return from the frontline.<\/p>\n\n\n\n

Also-happeneds<\/strong><\/p>\n\n\n\n