Assessment of the effectiveness of tax expenditures of municipalities for ensuring economic security and development of the territories of St. Petersburg

Orlovskaya Tamara Nikolaevna PhD in Economics Associate Professor, Department of Economic Security, Federal State Budgetary Educational Institution "St. Petersburg State University of Architecture and Civil Engineering" 190005, Russia, g. Saint Petersburg, ul. 2-Ÿ krasnoarmeiskaya, 8, of. 151-E e-tamara@mail.ru

Introduction

The development of the territories of megacities at the present stage is largely due to the financial capabilities of regions and cities. Local budgets and budgets of the constituent entities of the Russian Federation, being sources of financing for various activities aimed at supporting programs for the development of healthcare, social sphere, education, and life safety, are, according to scientists, for example, N. V. Vasilyeva ^[1], the guarantor of the independence and financial independence of the city/region.

In the work ^{[2, p.9]}, the following principles of the efficiency of spending tax revenues are highlighted: the expediency (or necessity) of spending funds on a specific event or program; sufficiency of allocated funds; transparency of the expenditure carried out. Consequently, one of the most important tasks of the tax policy of the subject of the Russian Federation and the municipality is to ensure economic security in the form of maintaining a balance of interests of society and the individual. As noted in the study ^{[3, p. 52]}, in relation to the state, tax security is a balance of the economic interests of the state and taxpayers. The state, as rightly noted in studies [for example, 4-6], is interested in increasing tax revenues. Meanwhile, taxpayers' interest lies in the efficient spending of budget funds, understood not only as "the greatest possible receipt of public services from the state" ^{[3, p. 52]}, but as the creation of a safe and comfortable living environment, that is, in providing the standard needs of the population in housing, social infrastructure (education, health, culture, etc.). sports, social protection) and security of residence. Consequently, the efficiency of spending tax revenues should also be considered from the standpoint of the population's assessment of the effectiveness of the achieved efforts of the authorities in these areas.

Problem statement

Tax security is one of the promising areas of modern research on the economic security of megacities. In fact, we are talking about assessing the effectiveness of tax policy, its impact on the formed residential environment, the ratio of the conflict potential of the territory, which, according to Pacione M. ^[7], each metropolis has, the impact of the created residential environment on the development of various social groups ^{[8, 9]}.

J. Stadelbauer ^[10], describing the causes of conflict nodes in megacities, notes the importance of an adequate response of the population to the spending of funds by the city authorities in the development of the urban environment. The study of tax security in terms of the effectiveness of tax expenditures on security, law enforcement, housing and communal services, education, culture, cinematography, physical culture and sports, social policy in the context of individual districts of St. Petersburg allows us to assess, among other things, the level of effectiveness of tax policy at the local level.

The ultimate goal of the study was to analyze the effectiveness of spending budget funds to create safe and favorable living conditions for the population in various administrative districts of St. Petersburg.

Materials and methods of research

The scientific basis of the study was the works of Russian and foreign scientists in the field of research on the effectiveness of tax policy ^[1-6], the conflictogenicity of global cities ^[7-10]. The author of the article relied on the materials of the database of indicators of municipalities of the Federal State Statistics Service, the information and statistical database of the Ministry of Internal Affairs of Russia in St. Petersburg and the Leningrad region based on the results of studying the opinions of citizens in St. Petersburg about the activities of the police in 2017, the materials of the Internet portal "Map of crimes of St. Petersburg" ^[11-12]. Statistical data on the main indicators of the local budget in St. Petersburg were used to assess the tax efficiency in each specific area of the metropolis ^[13]:

Actually executed revenues of the local budget, including income from the tax on total income, a single tax on imputed income for certain types of activities,

and budget expenditures related to solving the tasks of ensuring the safety of life and the comfort of living of the population, including expenditures on national security and law enforcement, housing and communal services, education, culture, cinematography, physical culture and sports, social policy.

When assessing the nodes of conflict in each particular area of the metropolis on the basis of sociological surveys, the following indicators were used: the proportion of residents who feel protected or rather protected from manifestations of crime; the proportion of residents who feel safe or rather safe on the roads.

The analysis of tax efficiency and conflict nodes in St. Petersburg was carried out in the context of the administrative districts of the metropolis. The analysis of the level of local economic security in various territories of the metropolis was carried out on the basis of normalization of indicators by reducing the dimensional scale to the dimensionless one according to the formula:

X normal=(Xi-Xmin)/(Hmm-Hmm) (1)

X normal - the normalized value of the input indicator;

Xi – the actual value of the i-th indicator;

Xmin – the minimum value of the indicator in the sample;

Xmax is the maximum value of the indicator in the sample.

The work uses general scientific methods of cognition, methods of logical analysis, expert evaluation, correlation analysis, methods of comparative analysis, the results of sociological surveys.

Research results and their discussion

According to S. V. Yavon ^[14], the city is "an ideal place for conducting field research, for studying the forms and processes of urban life" ^{[14, p. 377]}. The expediency of studying the relationship between tax policy and conflict zones in a megalopolis, as factors for assessing the level of economic security, is due to the need to analyze the possibility of achieving strategic targets to ensure social standards of living of the population by financing activities in the integrated and sustainable development of the territory, the creation of safe and favorable living conditions.  The study of the consequences of the government's policy of spending budget funds, the analysis of the adequacy of the population's perception of financial efforts in the development of the urban environment, allows us to assess the effectiveness of managerial influences, identify priorities of budget policy for the future.

The study of the principles of effective spending of tax funds ^[2], practical activities in the field of tax policy ^[3-6], models of urban environment development ^[14-16], confirmed the importance of improving methods for assessing the effectiveness of tax expenditures of local budgets, allowing to identify the real situation and form a socially oriented tax policy adequately perceived by the population. The methods proposed by most authors [for example, 2, p. 10] for evaluating effectiveness are based on a comparative analysis of the specific indicators of allocated funds for a specific event per person and an analysis of the level of provision of minimum state standards for a group of municipalities. However, this approach does not allow taking into account the opinion of the subject of tax efforts about the effectiveness of tax costs. Taking into account the importance of social and spatial components, it is proposed to focus on an approach that includes indicators of conflictogenicity (the opinion of residents regarding their vision of the security of living in a particular territory) and statistical data of local budgets.

Based on the correlation analysis, an assessment of the nature of the relationship between tax revenues and expenditures for certain budgetary purposes was carried out. The results obtained (Table 1) indicate that tax revenues in the local budget of St. Petersburg municipalities have the greatest impact on spending on culture and cinematography, social policy and housing and communal services (Table 1) (calculated by the author on the basis of ^[13]).

Table 1. Results of the assessment of the closeness of the relationship between the indicators characterizing the budget of municipalities of St. Petersburg

Since there is practically no connection between tax revenues and security expenditures, it is necessary to identify the need to adjust the expenditure part of the budget to ensure the safety and comfort of living of the population.

To assess tax efficiency, a coefficient was calculated that characterizes the ratio of income received from the paid tax on total income and the single tax on imputed income for certain types of activities, and expenditures for certain budgetary purposes — national security and law enforcement, housing and communal services, education, culture, cinematography, physical culture and sports, social policy (Table 2) (calculated by the author according to ^[13]).

Table 2. Tax efficiency coefficient for local budgets of municipalities of St. Petersburg

In this case, the coefficient of tax efficiency is in the range from 0.33 to 2.30, while the higher the coefficient value, the greater the amount of tax revenue in a particular territory of the metropolis, the local budget is more efficient. If the CNE is >1, then tax revenues exceed expenditures on social services, housing and communal services, national security and law enforcement. If the CNE is <1, then tax revenues are insufficient for spending on social services, housing and communal services, national security and law enforcement.

For transformation and normalization, the use of the most significant social indicators of the safety of living in various districts of St. Petersburg ^[11-12], compiled on the basis of sociological opinion polls, is proposed as input indicators of conflict nodes.:

· X1 – the proportion of residents who feel protected or rather protected from manifestations of crime, %,

· X2 – the percentage of residents who feel safe or rather safe on the roads, %.

When performing the transformation, the dimensionless value of the input indicator X is normal according to the formula (1) for groups of indicators of conflict nodes (Table 3) (compiled on the basis of ^[11-12]).

Table 3. Cumulative assessment of conflict nodes by districts of St. Petersburg

In this case, the security index ranges from 0.30 to 1.55, while the higher the value of the security index, the higher the level of security in a particular territory of the metropolis.

The results of the coupled analysis of tax efficiency and conflict nodes for the districts of St. Petersburg are given below (Table 4) (compiled according to ^[11-12]).

Table 4. Differentiation of megalopolis districts by tax efficiency of local budgets and potential assessment of economic security (on the example of St. Petersburg)

The study of the tax efficiency of the budgets of the territories of global cities within the framework of the proposed approach involves the study of various groups of indicators. The social aspect is represented by the opinion of residents regarding their vision of the security of living in a particular territory, reflecting the subjective component of conflict. The group of statistical data of local budgets reflects the objective component of the level of tax efficiency, showing how and in what areas a particular territory is inefficient from the position of covering expenses for various budget purposes with tax revenues. The combined analysis of two groups of indicators makes it possible to assess the level of efficiency of spending tax funds in creating favorable living conditions in the city and partly explains why a particular district wins in the opinion of residents, despite the low level of security according to statistics. In general, the results of the study allow us to conclude that the level of economic security and tax efficiency in the territory of the metropolis correspond.

Conclusions

According to the results of the analysis of the tax efficiency of local budgets in the districts of St. Petersburg, three groups of territories can be identified: 1) territories in which local budgets have the greatest tax efficiency — the Central and Admiralty districts (KBE > 1.5); 2) the main group of territories in which tax revenues are sufficient for spending on social services, housing and communal services, national security and law enforcement: Vasileostrovsky, Vyborgsky, Primorsky, Moscow, Kalininsky Kirovsky, Krasnogvardeysky, Krasnoselsky, Nevsky, Petrogradsky, Frunzensky districts (KBE = 1 ? 1.5); 3) territories in which local budgets do not have tax efficiency — Kolpinsky, Kronshtadtsky, Kurortny, Petrodvorets, Pushkinsky (CNE <1).

According to the results of the analysis of the social aspect of economic security reflected in the assessments of the population by the degree of protection, two groups of territories were identified: 1) residents of Vyborg, Vasileostrovsky, Kolpinsky, Pushkin, Primorsky, Kurortny, Admiralty, Moscow, Kronshtadsky districts feel the most protected (IC = 1.01?1.55); 2) residents of Kirovsky, Krasnogvardeysky, Nevsky, Kalininsky, Krasnoselsky, Tsentralny, Frunzensky, Petrodvorets districts feel less protected (IC = 0.26?0.90).

According to the results of the coupled analysis of the nodes of conflict and tax efficiency of local budgets, the estimates for the districts coincide: Admiralty (high tax efficiency of the budget and residents feel sufficiently protected), Vasileostrovsky, Vyborg, Primorsky, Moscow (sufficient tax efficiency of the budget and residents feel protected), Petrodvorets (the local budget has no tax efficiency and residents feel feeling unprotected).

In the Central and Kronstadt districts, there is a contradiction in the level of economic security and covering budget expenditures, including national security and law enforcement, with tax revenues. In the Central district there is a low level of security, but high tax efficiency, in the Kronstadt district there is a high level of security, but insufficient level of tax revenues with existing expenditures on security, social services, housing and communal services.

In Kalininsky, Kirovsky, Krasnogvardeysky, Nevsky, Krasnoselsky, Frunzensky, Petrogradsky districts, residents feel the least protected, despite the fact that tax revenues are sufficient for spending on security, social services, housing and communal services.

In Pushkinsky, Kolpinsky, Kurortny districts, local budgets do not have tax efficiency, but at the same time, according to residents, the necessary level of economic security is provided in the districts.