Home  Journals  Finance and Credit  16(640) - 2015 April

The principle of total (aggregate) expenditure coverage and special-purpose budget revenues

Vol. 21, Iss. 16, APRIL 2015

Article PDF Version

Available online: 30 April 2015

Subject Heading: BUDGET REGULATION

JEL Classification: 

Pages: 41-49

Importance Neither the international guidelines for public finance management, nor the Budget Code of the Russian Federation answer what the link between revenues and specific expenditures is. The article discusses the ways of formation and use of special-purpose revenues.
     Objectives The objective of the study is to analyze the practical use of earmarked budget revenues and to form the principle of universality (aggregate expenditure coverage) as the principle of the budget law.
     Methods I applied a method of comparisons and analogies to analyze the practical use of the principle of universality and earmarked budget revenues, and how the practice gets reflected in the legislation.
     Results Based on the comparative analysis of international experience in statutory regulation of the use of special-purpose budget revenues in OECD countries, I have drafted proposals on amendments to the Russian budget legislation; in particular, revision of Article 35 of the Budget Code of the Russian Federation. If adopted, the proposed amendments to Article 35 of the Budget Code of the Russian Federation will result in the situation when the principle of total (aggregate) budget expenditure coverage will fully comply with the existing Russian practice and international experience, and the use of earmarked revenues will stay consistent with the basic principles of public finance management.
     Conclusions and Relevance I conclude that the use of earmarked budget revenues may give certain advantages (as compared to the use of general revenues), if it is substantially limited. These findings enabled to formulate proposals on improving the budget law of the Russian Federation.

Keywords: earmarked, special-purpose, budget revenues, principle, budget universality, total, aggregate expenditure coverage, budget legislation, budget management, Budget Code

References:

1. Belitskaya G.N., Gafurova G.T. Gosudarstvennye vnebyudzhetnye fondy [State extra-budgetary funds]. Kazan, Poznanie Publ., 2008, 236 p.
2. Vafin E.Ya., Zhurkina N.S., Kapkaeva N.Z. Vnebyudzhetnye fondy [Extra-budgetary funds]. Available at: Link. (In Russ.)
3. Golyshev G.A. Razvitie infrastruktury s ispol'zovaniem kontsessionnykh i dolgosrochnykh investitsionnykh kontraktov [Developing the infrastructure with the use of concession and long-term investment contracts]. Finansovyi zhurnal = Financial Journal, 2014, no. 1, pp. 101–110.
4. Kuzin I.R. Novaya zhizn' dorozhnykh fondov [New life of road funds]. Available at: Link. (In Russ.)
5. Kuz'min I. Vozrozhdenie dorozhnykh fondov [Revival of road funds]. Available at: Link. (In Russ.)
6. Polyak G.B. Byudzhetnaya sistema Rossii [The Budgetary system of Russia]. Moscow, YUNITI Publ., 2010, 703 p.
7. Finansovoe pravo v voprosakh i otvetakh [Financial law in questions and answers]. Moscow, Prospekt Publ., 2009, 229 p.
8. Finansovoe pravo [Financial law]. Moscow, Yurist" Publ., 2004, 749 p.
9. Tselevye byudzhetnye i vnebyudzhetnye fondy [Special-purpose budgetary and extra-budgetary funds]. Moscow, Vuzovskii uchebnik Publ., 2009, 223 p.
10. EUROSAI Financial Rules. Rule 16. Available at: Link.
11. Porter R., Walsh S. Earmarks in the Federal Budget Process. Harvard Law School. Federal Budget Policy Seminar. Briefing Paper, 2006, no. 16, p. 2.
12. Brett C., Keen M. Political Uncertainty and the Earmarking of Environmental Taxes. Journal of Public Economics, 2000, March, vol. 75, p. 3.
13. Marsiliani L., Renström T.I. Time Inconsistency in Environmental Policy: Tax Earmarking as a Commitment Solution. The Economic Journal, 2000, March, vol. 110, pp. 123–138.
14. Pirttila Jukka. Earmarking of Environmental Taxes and Pareto-Efficient Taxation. FinanzArchiv, 1999, vol. 56, pp. 202–217.
15. Bingyuang Hsiung. A Note on Earmarked Taxes. Public Finance Review, 2001, no. 29, p. 224. Available at: Link.
16. The Political Economy of Environmentally Related Taxes. OECD. Paris, 2006, pp. 171. Available at: Link.
17. Cuny T.J. Offsetting Collections in the Federal Budget. Public Budgeting & Finance, 1988, Autumn, pp. 96–109.
18. Budgetary treatment of lease-purchases and leases of capital assets. OMB Circular no. A–11, 2014.
19. Federal Budget Code of August 19, 1969 (Federal Law Gazette I, p. 1284), as most recently amended by Article 4 of the Act of July 31, 2009 (Federal Law Gazette I, p. 2580).
20. Loi organique relative aux lois de finances. Version consolidée au 13 Octobre 2013. Available at: Link.

View all articles of issue

ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

Journal current issue

Vol. 30, Iss. 3 March 2024

Archive