FINANCIAL MECHANISM OF THE CITY BUDGET FORMATION

The research subject is features of the financial mechanism functioning of the city budget formation, its economic and organizational basis. The article purpose is substantiation of necessity the creation of an effective mechanism for the city budget formation in the interbudgetary relations system, the development of main provisions, methods and tools for its implementation. The research methodology is the works of leading national and foreign scientists on local budgets. As research methods applied systemic and structural approaches, methods of analysis and synthesis, the comparison and scientific abstraction. Results of the work are revealing the features and systematization the main organizational principles of the financial mechanism of the city budget formation, foundation the submission that the economic basis for the budget system formation is the gross domestic product. The article presents the basic parameters of Ukraine’s local budgets for 2011-2013, found the share of local budgets revenues and expenditures in Ukraine’s consolidated budget, and their proportion which distributed through the GDP. Author developed an effective mechanism for the city budget formation in the interbudgetary relations system, the main blocks are: the goal; the principles; the methods and tools; the content of mechanism; the evaluation criteria effectiveness. Conclusions. The evaluation criteria effectiveness of the mechanism is attributes set on which estimated the management system effectiveness in general. The implementation of an effective mechanism allows the following evaluation criteria effectiveness of the mechanism: reducing centralization of budget funds; growing the GDP reproduction on the territory; balancing the budget system; increasing budgetary provision for 1 city resident; social and economic development of the territory; raising the living standards of the population.