Russian regions are cutting spending on social programs in order to redirect funds toward the Kremlin’s military needs. In particular, the authorities in the Tula Region diverted more than 54 million rubles (about $637,000) that had been earmarked for social assistance to the population, and redirected them to payments for military personnel, according to the Center for Countering Disinformation (CCD) on its Telegram channel.
The spending cuts have affected payments to foster parents for the care of orphaned children, as well as assistance to low-income families, retirees, and labor veterans. In St. Petersburg, government officials also plan to reduce budget expenditures by 70.2 billion rubles (approximately $828 million), which will most significantly impact funding for education, healthcare, and housing and utilities.
At the same time, spending on payments to war veterans and their families is set to increase by another 6.4 billion rubles (about 75.5 million dollars). The Center for Political Analysis notes that these measures are being taken against the backdrop of a significant deficit in local budgets, and that regional authorities are effectively taking money away from orphans, medical workers, and pensioners to support the Kremlin’s military efforts.
As a reminder, next year Russia plans to raise taxes on its wealthiest citizens and resource companies to continue funding the war against Ukraine. The Russian Ministry of Finance announced the tax hikes four days after the State Duma elections.
Specifically, there are plans to raise the tax rate on income from dividends, deposits, and real estate sales from 15% to 22%. For more details on Russia’s ability to finance the war, see the analysis conducted by Tetyana Bohdan, Ph.D. in Economics.
