Step 4 - Identifying the scope of resource needed at each level
The budget system should be renewed completely. When the size of raion or community increases additional resources appear at local level. They could be efficiently used. The residents of villages and small towns will only win, because it is the very level at which money is needed, for example for public works – road repairs, law and order, elementary school, fire service etc.
All the local budgets will uphold direct contact with the state bodies. Therefore, the money to the local community will be floating stably and expenses would be predictable. Local taxes will become the basis for the local budget, which depends directly on community and its power. It will motivate the authorities to collect taxes and the residents – to pay them.
The capacities of local budget will be enhanced. This is the necessary condition for the development of the local economy. The administrative obstacles for small and medium businesses development in the larger community areas will be removed.--New work places will be created.-- The revenues of the local budget will increase.