Infrastructure needs add pressure on expendituresThe structure of expenditures should remain relatively stable in 2007–2010, as it did in 2002–2006. Subsidies to local budgets are about 50% of total expenditures, followed by expenditures for health care, education, and transport. Although severe weather conditions result in high labor and construction costs, the krai benefits from an ample supply of electricity at low cost. The administration controls the growth of operating expenditures, and the share of salaries does not increase as a proportion of total expenditures. Historically, Krasnoyarsk Krai’s share of capital expenditures has been low (10% of total expenditures in 2002–2006), compared with peers. In 2007, however, capital expenditures should increase significantly, to more than 20% of total expenditures. Capital subsidies to lower budgets are at one-third of capital expenditures. Furthermore, we expect these high levels to continue for the next three years. Although the planned increase in capital expenditures provides some flexibility, such flexibility is restricted by the significant investment needs typical of a remote region. In 2008-2010, the most urgent expenditures will be the purchase of new health care equipment and modernization of hospitals and clinics; while the largest capital expenditure items are road construction, housing construction, and the upgrading of utility networks, followed by support for the agriculture sector.
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