{"id":1136,"date":"2026-11-06T21:48:42","date_gmt":"2026-11-06T20:48:42","guid":{"rendered":"https:\/\/www.noyardstick.com\/?p=1136"},"modified":"2026-11-06T21:48:44","modified_gmt":"2026-11-06T20:48:44","slug":"on-the-drafting-of-regional-budgets-regional-legislatures-and-others","status":"publish","type":"post","link":"https:\/\/www.noyardstick.com\/?p=1136","title":{"rendered":"On the drafting of regional budgets, regional legislatures and others"},"content":{"rendered":"\n

What does the mobilization for the Russia’s whole budget system for what the Kremlin surely expects to be one last push to win the war look like in the data? How is the ruling party’s grip over regional governments solidifying after the September elections and what does this mean for conflict resolution along the vertical of power? Thoughts on these and an assortment of other regional news that did not make the Bear Market Brief cut. <\/strong><\/p>\n\n\n\n\n\n\n\n

A bird\u2019s-eye view of regional finances in 2027<\/strong><\/p>\n\n\n\n

Regions have started drafting their 2027 budgets. As of this writing, most regions have presented their first draft, and based on this sample the picture one gets is that of a continuation of lean years in regional finance, with most regions that posted their fiscal plans for the next year planning to run a deficit and many will cut expenditures compared to 2026. Final figures will depend on the final distribution of federal transfers, but since at best these are going to be kept at their current nominal level<\/a> and skewed towards transfers requiring cofinancing<\/a>, they will not change the overall fiscal outlook very significantly. The government does plan to set apart 100 billion<\/a> rubles as a safety reserve for regions with the worst budget indicators, but this is to cover short-term needs, not to resolve structural issues or to enable forward planning. The overall deficit of consolidated budgets may surpass last year\u2019s total of 1.5 trillion<\/a> rubles, and while the Finance Ministry<\/a> estimates it to remain under 1 trillion next year, it is hard to see how regions can close the gap between revenues and expenditures as long as their main sources of income – personal and corporate income taxes and federal transfers – are not forecasted to grow significantly or at all in real terms.  The Nizhny Novgorod based outlet Otkryty Nizhny<\/a> said that as many as two-thirds of regions may cut construction and urban-improvement spending next year.<\/p>\n\n\n\n

The draft budgets, where available, confirm that these are some of the main areas that regions are going to cut funding on, along with capital spending in general, utilities renewal and agriculture. The stress is especially visible in regions that have faced industrial crises for multiple years. The Irkutsk Region<\/a> will cut spending on affordable housing, utilities modernisation and road repair funds. Even social support stands to be reduced, albeit the cuts may be partially compensated by transfers. The Voronezh Region is planning<\/a> similarly deep cuts to housing and utilities as well as its agriculture support programme. The Samara Region<\/a> will cut school and culture construction and road funds, all while funding for military recruitment will grow. Nizhny Novgorod is cutting 15 percent<\/a> of its regional and municipal staff. The list goes on.<\/p>\n\n\n\n

These cuts would continue an ongoing reduction of regional spending on anything other than protected items (e.g. social support to vulnerable categories and salaries of public employees) as war-related spending increasingly crowds out the funding of civilian policies. Since 2022, 66 regions have cut funding on housing and utilities<\/a> at least once, notwithstanding growing frustration with lagging repairs<\/a>. After some growth, regional health care spending was overall reduced again<\/a> from 2025 on, and the cuts are widespread: in the first half of 2026 health care financing dropped by 5.8 percent<\/a> in nominal terms, with 42 regions<\/a> cutting and 11 cutting hospital funding by more than 20%.<\/p>\n\n\n\n

After the September Duma vote several regions announced cuts to their current budgets. St. Petersburg has adopted a 70-billion-ruble cut<\/a>, with payments to large families reduced, the resettling of families from communal apartments dropped as a priority, and public sector staff cut by up to 15%<\/a> by April, while raising payments to soldiers\u2019 families. Irkutsk started laying off<\/a> public-sector workers as well, as its expenditures outstripped income by more than 11 percent. Some regions clearly linked spending cuts to the necessity to protect war-related expenditures: in the Maritime Region the regional labor ministry<\/a> linked a delay in social payments to war-related costs. The Tula<\/a>, Arkhangelsk and Tomsk<\/a> Regions all reallocated funds from social programmes (and in Tomsk\u2019s case, health insurance payments) to soldiers. Once again, the list could go on (and I have already reviewed some earlier examples on this blog).<\/p>\n\n\n\n

Regions are not facing an overall budget crisis, but, as I explain in an upcoming piece for Riddle, the gap between most regions that face a slow and steady decline in fiscal capacity and a handful of basket cases that have been running deficits and increasing debt service costs for several years, is opening, all while the policy solutions proposed by the federal government are inadequate to address the scale of the problem. What we are seeing is not only the consequence of worsening overall economic conditions and mismanagement, but of a systematic mobilization of the whole budget system for the purpose of increasing the war effort in Ukraine, via increasing taxes and concentrating fiscal income at the federal level, while requiring regional budgets to take over an increasing array of expenditures related to the current conduct of the war and the future reintegration of veterans.<\/p>\n\n\n\n

The latest of these steps concern the government\u2019s planned windfall tax<\/a> on the mining and metallurgical sector, which will further undermine the tax base in many regions, as even Murmansk governor Andrey Chibis seemed to imply<\/a>. But this is just the latest in a series of tax rises and tax breaks<\/a> punching holes in regional finances over the past year. Even the government\u2019s debt forgiveness program, originally created<\/a> to help regional budgets allocate more funds to capital expenditures and repairs, has been gradually rewired over the past two years to encourage regions to spend more money on war-related purposes, primarily recruitment<\/a>. A bill<\/a> in the federal government\u2019s 2027-29 budget package would enable all regions to spend every ruble they free up this way on this. And in order to stabilize regional budgets, the federal government will tap municipalities, even though three years ago Putin himself instructed<\/a> the government to shore up their finances. The budget package will cut the guaranteed municipal share of personal income tax from 15% to 7%<\/a> from 2028, move all the agricultural tax<\/a> receipts to regions and allow them to keep more fuel excise<\/a> receipts than currently. The restructuring that prepared the ground for these cuts was the federal reform of municipal administrations, adopted<\/a> in 2025, which pushed most regions to scrap lower-tier municipalities and fold their institutions into higher-tier municipalities, and which triggered protests<\/a> in several regions due to fears that the reforms would make public services less accessible (in the Krasnoyarsk Territory, which saw some of the largest protests against the reform, the regional government also started merging hospitals<\/a>). In fact, it appears that the changes may very well turn municipal services into one of the many domestic policies that governors can deprioritize at will as they juggle fiscal demands and try to keep short-term political risks low.<\/p>\n\n\n\n

Changing roles in regional legislatures<\/strong><\/p>\n\n\n\n

Russia did not only hold a federal legislative election in September. Among other regional and local elections, 39 regions, almost half of all, held regional legislative elections. The results were predictable United Russia majorities<\/a> in each of these elections, albeit these were not uniform. In the Vologda Region, for example, which has seen an uneasy relationship<\/a> between the region\u2019s established business elite and its governor, Georgy Filimonov, United Russia actually lost six mandates<\/a> in the regional parliament and barely held on to a majority. The ruling party also weakened<\/a> in Karelia, another Northwestern region where the local governor\u2019s grip on the province has been relatively weak. In both cases, single-mandate, first-past-the-post districts helped the governing party to an overall majority. Or take the Novgorod Region where the anti-war Yabloko party was allowed not only to stand for office, but also to win a seat<\/a> in the regional legislature.<\/p>\n\n\n\n

But these outliers only give a bit of color to an otherwise very dull picture, especially if one looks at the distribution of positions in the new regional legislatures and other moves following the elections. Of the 39 renewed legislatures, most gave United Russia almost every leadership post<\/a>, unlike in the State Duma where the Communists chair five committees<\/a>. It would appear that the authorities are much less wary of the federal leadership of the party than of the regional chapters, which may represent local elites and are often more plugged into local grievances too. Take the Altai Territory, for instance, where law enforcement cracked down<\/a> on the local Communist Party leadership over the past year and where Maria Prusakova, a former Duma deputy, faced threat to remove her from the ballot just a day before the election. The Communist Party came second in the region, but the number of its seats fell from 24 to 7<\/a>; according to the party this was due to widespread violations and coerced<\/a> electronic voting. United Russia took all ten<\/a> committee leadership positions in the new legislature.<\/p>\n\n\n\n

The systemic opposition lost parliamentary positions in a similar way<\/a> in the Sverdlovsk, Lipetsk, Tomsk, Novgorod and Omsk Regions, to name just a few. Even in the aforementioned Vologda Region and Karelia, where United Russia faced setbacks even in the official results, the party took all leadership positions in the new legislatures. The Novgorod Region\u2019s assembly barred relatives<\/a> of \u201cforeign agents\u201d from working as deputies\u2019 aides, essentially allowing the federal Justice Ministry to overrule these appointments. In general, as some analysts pointed out, the appointment of personalities linked to the executive as speakers<\/a> in several regions suggests that governors are seeking to take a more direct control over legislatures. In Khakassia, meanwhile, where the United Russia-led legislature (not elected this year) has been in a protracted conflict with the region\u2019s communist governor, Valentin Konovalov, the parliamentary majority decided to stop broadcasting<\/a> sessions and curbed<\/a> the rights of deputies.<\/p>\n\n\n\n

In a somewhat different, but still notable development, United Russia deputies also filed an amendment to the basic law of the Sakha Republic in late September, which would remove the two-term limit for governors just in time to allow Aysen Nikolaev, the sitting governor, to run for a third term<\/a> in 2028. Sakha will thus likely become the last Russian region<\/a> to abolish this limit after the Kremlin\u2019s 2021 public administration reform allowed regions to do so. While the president can appoint and dismiss governors at will for a \u201closs of trust<\/a>\u201d, allowing governors to serve more than two terms helps mitigate the problem of what happens with governors after they resign if there are no available Federation Council seats or other federal jobs to appoint them to.<\/p>\n\n\n\n

In general, the position of governors is moving towards one focused on political management and lobbying in the Kremlin: more and more<\/a> governors are appointing executive prime ministers (most recently the Chelyabinsk Region<\/a> and the Belgorod Region<\/a>), likely in an attempt to share political responsibility for the operative implementation of policies. United Russia\u2019s control over regional legislatures may be solidifying, but this does not mean that conflict resolution is getting easier; friction points are simply elsewhere.<\/p>\n\n\n\n

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