STATE AND THE ECONOMIC SOVEREIGNTY OF LOCAL GOVERNMENTS

A hypothesis is developed that the existing legal sovereignty of local governments is just one of the presumptions of a real sovereignty. In spite of the fact that there is a so-called dualism between the State and the local governments, the State plays a decisive role in the real compliance with economic sovereignty of local governments. The income derived from the activities connected with municipal property formed just 9 % of total income of the communities; the remaining 91 % formed the income of the municipal budgets independently upon the municipal property. In accordance with their functions the local governments depend on the income provided by the State in the form of the so-called intrusted income or in the form of a subsidy. It is important that the intrusted income and the subsidy - economically stimulating the local governments - should be balanced. The present way of the subsidies policy cannot be taken for a working one. The communities are generally treated as budget organizations and their self-governing position is not respected, contradictorily to the scenary of the economic reform and to the law on municipal organizations. The situation does not comply with the international recommendations either.