Romanian Journal of Economic Forecasting – 1/2011 193 ANALYSIS OF THE PROCEDURE FOR BALANCING THE LOCAL BUDGETS IN ROMANIA Liliana BUNESCU 1 Marian CRISTESCU 1 Abstract This paper aims to provide a short analysis of the procedure for public financial resources allocation throughout the country to supplement the local budgets. Is there a proper, objective and balanced distribution of public funds among the Romanian counties? Does any county face disadvantage by the allocation of amount from certain state budget revenues? An unequal, irrational economic development within a country results in changing the equilibrium and influences the overall balance and the individuals of the state. Local budgets are highly dependent on the funds they receive from the central budget. Very few local communities contrive to generate sufficient revenues by their own. Balancing local budgets is a necessity, but the balancing procedure suffered many legislative changes. Inadvertency consists not necessarily in the procedure of distribution of public money, but in the efficiency and effectiveness with which they are used locally. Keywords: budgetary allocations, balancing local budgets, public appropriations procedure, public procedure, VAT repartition JEL Classification: H72, H61 1. Introduction Public administration reform is one of the priority themes of the current government, focusing on its financial component. When the economic crisis is felt at all levels and in all areas it is not hard to make it obvious that the procedures and practices currently followed by the Romanian authorities are at a higher level of austerity and they are challenged by the current government. Balancing local budgets remains a current topic and it is subject of many debates. Also, another issue that has made its make in the past, present and future is the local autonomy of an administrative-territorial unit. Local autonomy is only financial and 1 “Lucian Blaga” University, Sibiu, mp_cristescu@yahoo.com , liliana_sibiu@yahoo.com 12.