The article is aimed at substantiating the basic principles of the formation of local budgets for the medium term in the context of improving the efficiency of budget policy. An analysis of socio-demographic and economic indicators of territorial communities is carried out, determining that their consolidation has a positive effect on the optimization of the local budget expenditures. The efficiency of expenditures of local budgets of Central and Eastern Europe was evaluated on the basis of Musgrave criteria and the aggregated indicator of quality of public goods and services. The empirical analysis of the Gini index, consumer inflation, the volatility of economic growth and exchange rate, the level of GDP per capita, the pace of economic growth and unemployment for Ukraine indicate the urgent need to develop the institutional environment of budget policy and improve the budgetary architectonics. An evaluation of the efficiency of local budget expenditures was also carried out through a comparative analysis of the quality of services in the sphere of management, education, infrastructure of healthcare, which was based on international ratings and indicators. It is identified that the highest level of efficiency is provided in the Baltic states, Poland; Armenia and Georgia (due to low GDP expenditures); Belarus. The carried out analysis justifies the need for Ukraine to optimize the expenditure part of the budget in favor of such areas as healthcare and infrastructure. Practical recommendations for increasing the fiscal significance of tax revenues credited to local budgets and for expanding the fiscal space of territorial communities are substantiated. The provisions on optimization of the tax debt of local budgets are presented.

THE ROLE OF LOCAL BUDGET EXPENDITURES IN THE SOCIAL WELFARE ENSURING Розкрито роль видатків місцевих бюджетів у забезпеченні соціального та економічного роз витку територіальних громад. Проаналізовано бюджетну політику у сфері видатків, реалізова ну органами місцевого самоврядування за умов фіскальної децентралізації. Охарактеризова но динаміку основних структурних елементів місцевих видатків за економічною та функціональ ною класифікаціями. Запропоновано теоретичні та прикладні підходи до оптимізації компози ційної структури вказаних видатків з огляду на їх продуктивність. Визначено, що протягом пе ріоду 2004-2018 років у структурі видатків місцевих бюджетів видатки на інфраструктуру скла дали 6,64 %, на розвиток людського капіталу-60,92 %, на соціальний захист та соціальне забезпечення-22,82 %. З'ясовано значення видатків розвитку місцевих бюджетів у контексті забезпечення стійкого приросту фізичного та інтелектуального капіталу. Здійснено економет ричний аналіз впливу капітальних видатків місцевих бюджетів на динаміку ВВП. Поглиблено методологічні підходи до середньострокового планування бюджету на рівні адміністративно територіальної одиниці. The local budget expenditures' ensuring role in social and economic development of territorial communities was revealed. Public expenditure policy, implemented by local self government bodies in the context of fiscal decentralization, was analyzed. The interrelations between fiscal autonomy and responsibility of local powers were disclosed. The main local spending structural elements' dynamics was described, considering economic and functional classification. Both theoretical and applied optimization approaches, regarding the composite structure of public expenditures and their productivity as well, were offered. It was determined that over the investigated period from 2004 to 2018, expenditures on infrastructure were equal to 6.64 per cent in the total spending structure of local budgets, expenditures on human capital were equal to 60.92 per cent, and expenditures on social protection and social security were equal to 22.82 per cent. At the same time, those groups of expenditures were equal to 1.00 per cent of GDP, 8.00 per cent of GDP, and 4.74 per cent of GDP respectively. The GDP's redistribution through the local budgets' expenditures was equal to 14.01 per cent. The strategic division of local expenditures in two opposite groups-productive and non productive-was grounded. In order to achieve sustainable growth, local authorities should increase productive spending. The most common productive expenditures were associated with education, public health, and transport and social infrastructure. Meanwhile, non productive public expenditures should be cut. The significance of the local budgets' development expenditures, ensuring sustainable growth both of physical and intellectual capital, was determined. Econometric analysis of the local МЕТА СТАТТІ Метою статті є розкриття і обгрунтування ролі ви датків місцевих бюджетів у забезпеченні суспільного добробуту та економіч...