Murmansk blames its 78bn debt on lost profit tax

On 2 November Murmansk oblast published decree No. 683-PP of 29 October, approving the main directions of its state debt policy for 2027 and the planning period 2028 and 2029. It is signed by the governor, A. Chibis, takes effect on 1 January 2027 and repeals the equivalent decree issued a year earlier to the day. Eight pages, scanned without a text layer; we read them as images in this session.

Most documents of this kind describe debt without explaining it. This one explains it, in a single sentence of its own second section:

“The continuing growth of life-support spending (above all on wages because of the rise in the minimum wage, the purchase of medicines, material assistance to servicemen involved in the special military operation and to members of their families), maintaining the region’s high co-financing share when federal support is provided, and also the need to service the high commercial debt, the emergence of which became a direct consequence of the fall in Murmansk oblast’s tax revenues, do not allow the trend of growth in the state debt to be broken.”

A region, in a signed normative act, naming its own commercial borrowing as a consequence of lost taxes — and listing payments to servicemen among the reasons it cannot stop borrowing.

The tax that went

The decree gives the fall in figures. In 2025 the oblast collected 98.6 billion roubles of tax and non-tax revenue: 3.4% less than the appropriations it had approved, and 10.5% below the 2023 outturn. The cause it names is “a sharp fall in receipts of profit tax on organisations from the region’s key taxpayers”:

Two-fifths of the tax disappeared in one year, and a ninth of what remained in the next. The oblast does not name the taxpayers; in a region whose industrial base is mining, metals and fertiliser, the export price is the usual explanation, but the decree does not offer one.

Rising and still far below: the oblast makes the distinction itself

For 2026 the document reports “a positive trend in receipts of profit tax on organisations (estimated at 19.0% above plan)”. The next sentence is the one that matters:

“However the growth of profit-tax receipts in 2026 does not reach the level of receipts for 2023 (by 28.7%).”

This is the separation of rate from level, made by the government that collects the money. The direction of travel is up and the comparison with last year is flattering; measured against the pre-collapse year the tax is still more than a quarter short. It is the distinction this site exists to hold, and it is unusual to find it drawn in the source rather than against it.

No equalisation, because the region still looks rich

Murmansk receives neither equalisation grants nor balance-support transfers. The decree gives the reason — its calculated budget capacity index, which measures a region against the national average:

The margin above the average has closed four-fifths of the way to it in two years, and the decree still describes the level as “high”. Until it crosses 1.0 the federal equalisation machinery does not engage, so the instrument available to a region in this position is not a grant but a loan. That is the structural point behind the quoted sentence: the debt is what the oblast has instead of support.

What the debt costs, and what it is made of

State debt grew 24.0 billion roubles in 2025 and stood at 76.5 billion on 1 January 2026 — 70% of annual revenue excluding gratuitous receipts, inside the Budget Code’s article 107 limit. Servicing it cost 7.4 billion roubles in 2025, which the decree attributes to drawing bank credit in volumes above the previous year “and also an increase in the cost of commercial credits attracted at higher rates”.

By 1 September 2026 the debt was 78.1 billion roubles:

The guarantees secure the heat utility’s borrowing to pay resource suppliers, fuel among them. Within the 28.7 billion of federal credit the decree itemises 10.5bn for deficit financing and roads, 3.1bn of infrastructure budget credits, 2.5bn of special treasury credits, 3.2bn of treasury infrastructure credits and 9.4bn of credit to top up the balance on the single budget account. The five lines sum to 28.7 exactly.

The commercial debt fell, and that is the part to read twice

Compared with the start of 2026 the total rose only 1.6 billion, or 2.0%. Underneath, the composition moved hard:

Both figures are the decree’s own, and because its components are rounded to one decimal they do not divide exactly: 1.6 against 76.5 is 2.1%.

A fifth of the commercial debt is gone. The decree says plainly what paid for it: budget credits rose “in connection with the receipt at the beginning of 2026 of a budget credit to top up the balance of funds on the single budget account” — the 9.4 billion line above. Murmansk was, it adds, “one of the first among the subjects of the Russian Federation” to join an experiment by Minfin and the Federal Treasury granting that credit “on demand”, and participation “made it possible to extend the use of the budget credit until December 2026”.

So the improvement in the market half of the balance sheet is funded by a federal liquidity facility whose extension runs out next month. A credit to top up a cash account is not a substitute for revenue and is not meant to be: it exists to carry a budget across the gap between spending and receipts inside a year. The 20.1% reduction in commercial debt rests on it, and the decree sets no plan for what replaces it in January.

Write-offs: one rouble forgiven, eight postponed

Under the federal write-off rules of decree No. 79 of 1 February 2025, and an agreement amended five times since April 2025, the oblast records for 2026: 364.5 million roubles written off, and 686.7 million whose repayment moves from 2026 to 2030.

The planning years repeat the second half of that pattern without the first. Repayments of 686.7m in 2027, 686.7m in 2028 and 899.6m in 2029 “will be moved” to 2031, 2032 and 2033. Adding the 2026 deferral, 2.96 billion roubles of repayment is pushed into the 2030s against 364.5 million actually cancelled — a ratio of roughly eight to one. Debt relief as it reaches this oblast is mostly a change of date.

What this means for the series we track

We measure the consolidated regional budget balance as a rolling twelve-month total for all of Russia’s regions together. It stands at a deficit of 1.466 trillion roubles, scoring 33 of 100 against a pre-war anchor of a 0.661 trillion surplus at the end of 2021 and a registered trouble line at a 2.5 trillion deficit. Our guide to regional budgets explains how the series is built. This decree moves none of it: no reading changed in this morning’s run, and the strength index is 46 of 100, in the stress zone.

What it adds is the causal statement the other regional documents of this autumn leave out. Khanty-Mansi borrowed 88.9 billion from the bond market and the banks; Rostov raised its deficit a third time, funding 95.7% of it with bonds and bank credit; Irkutsk raised its deficit 50% with bank credit capped at two-year maturities. Each shows the borrowing. Murmansk writes down why the borrowing began.

It is also the mirror image of Ivanovo, which published its own 2027–2029 debt policy three days earlier. All of Ivanovo’s debt is federal credit; it plans no market borrowing at all and shrinks its debt by write-off. Murmansk owes 57.6% of its debt to banks, pays 7.4 billion a year to do so, and is too well-off to qualify for the grants that would reduce the need. The two decrees are the same instrument describing opposite positions: one region cannot reach the market, the other cannot leave it.

Against that, the federal instruments built this autumn do little. The centre deferred 300 billion roubles of budget-credit repayments, replaced the guarantees on equalisation grants with a 90% floor — which Murmansk does not receive — and ended the accrual of interest on budget debts in court. None of it touches 45 billion roubles owed to banks.

What we do not know

What the 2026 profit tax actually is. The decree gives 19.0% above plan and 28.7% below 2023, but no rouble figure and no plan figure, so the two percentages cannot be reconciled into a level from this document alone. We have not inferred one.

What the commercial debt costs. No interest rate appears in the act. Section 6 names interest-rate risk as “the high cost of market borrowing and, as a consequence, the risk of failing to meet the terms of the agreements as regards the size of the rate for the use of the commercial credits attracted” — which says a rate ceiling exists in the oblast’s agreement with Minfin, without disclosing either the ceiling or the rate actually paid.

What is planned for 2027–2029 in roubles. The decree sets out goals, principles, instruments and risks, and no amounts: no borrowing programme, no debt ceiling, no service forecast. Those figures belong in the draft budget law, which the same series of decrees approved on 29 October (No. 687-PP) but whose text the portal has not published.

How much of the 78.1 billion falls due in 2027. No maturity profile appears anywhere in the document, so the refinancing requirement for the first year the policy covers cannot be read from it.

Which taxpayers. The phrase “key taxpayers of the region” is not expanded, and no sector, company or price is named as the reason their profit fell.