Amidst the budget process for the 2027 state budget, Kharkiv Mayor and head of the Association of Frontline Cities and Communities Ihor Terekhov has called for maintaining the social focus of financial flows. In current economic realities, marked by revenue crises and uncertainty regarding international aid, mayors of cities in the combat zone insist on the need to create adequate conditions for supporting the population and restoring critical infrastructure. This week, the Verkhovna Rada of Ukraine plans to consider the bill in the first reading.
Balancing Defense and Citizen Protection
Ihor Terekhov emphasizes that state financial policy should rest on two fundamental pillars: ensuring the country's defense capability and protecting the interests of citizens in difficult life situations due to the war. The Association of Frontline Cities has sent an extensive package of proposals to the Cabinet of Ministers and Parliament, covering the needs of displaced persons, the education sector, and social standards. According to the mayor, even under conditions of maximum austerity, the state must not abandon investments in the survival of affected communities.
Financial Resilience of Frontline Territories
The Association's key demand remains the retention of the 64% personal income tax (PIT) share in local budgets and the refusal to seize reverse subsidies from communities affected by active hostilities. The Verkhovna Rada Budget Committee has already recommended that the government process these issues. For cities like Kharkiv, these funds are critical, as they allow for the rapid restoration of power, heating, and water supply after shelling, as well as supporting the operation of municipal services and transport.
Solving the Housing Issue for IDPs
A significant part of the Association's proposals is dedicated to internally displaced persons (IDPs) who have lost their homes. The Budget Committee supported the initiative to expand the use of surplus local budget funds for the purchase and arrangement of housing for displaced persons. Furthermore, the government is recommended to work out mechanisms for concessional housing loans and the creation of social housing funds, which is a priority for adapting people to new conditions.
The Significance of Budget Decisions for the Future
The decisions made in the coming weeks as part of the budget process will determine the survivability of many communities in 2027. Although a number of recommendations have already been approved by committees, the final fate of the proposals depends on the government's willingness to revise its approach to resource allocation. Frontline cities, bearing the main burden of overcoming the consequences of Russian aggression, expect specific financial guarantees from central authorities that allow them to meet the basic needs of millions of citizens without deferral to the post-war period.
