FINANCIAL FRAMEWORK OF THE ECONOMIC SELF-SUFFICIENCY OF UKRAINE'S TERRITORIAL COMMUNITIES: CURRENT STATE AND DEVELOPMENT TRENDS

<jats:p>The article examines the formation of the financial foundations of the economic self-sufficiency of territorial communities in Ukraine under contemporary socio-economic challenges. The relevance of the study is determined by the need to ensure the resilience of local self-government during the full-scale war, the growing demand for territorial recovery, and changes in the state's budgetary policy. The purpose of the study is to assess the current state of the financial support of territorial communities, identify trends in the development of local budgets, and analyze the impact of medium-term budget planning on the level of their economic self-sufficiency. The study analyzes the dynamics of the share of local governments' own-source revenues in GDP, the role of local budgets within the structure of Ukraine's consolidated budget, and the provisions of the Budget Declarations for 2025–2027, 2026–2028, and 2027–2029. The findings indicate that the fiscal decentralization reform significantly strengthened the financial role of territorial communities during 2015–2021. However, following the outbreak of the full-scale war, the centralization of budgetary resources intensified. The research demonstrates that the projected increase in the financial resources of local budgets in the medium term is not accompanied by a proportional increase in the financial autonomy of territorial communities. The main factors behind this trend include the continued redistribution of the military personal income tax (PIT), the growing role of intergovernmental transfers, the centralization of financing for specific public sectors, and limited funding for regional development instruments. At the same time, a positive trend is the introduction of a new public investment management system focused on strategic planning and the efficient use of budgetary resources. The study substantiates that ensuring the economic self-sufficiency of territorial communities in the long term requires restoring a balance between state support and the financial autonomy of local self-government, expanding the own-source revenue base of local budgets, fostering entrepreneurship, increasing the investment attractiveness of territories, and improving the efficiency of local resource management.</jats:p>