Politics
State Duma Municipal Services Funding Act Sets Moscow Apart From Other Regions on Utility Allocations
The legislation revises federal transfers for water, heating and waste services, with Moscow set to receive 12 percent less per resident than the formula applied in St. Petersburg and Kazan starting in the 2027 budget year.
How we reported this
The State Duma passed the Municipal Services Funding Act on 5 July 2026, changing the way federal transfers support local utilities across Russian regions. Moscow residents will see the new formula applied to their water, heating and waste bills from the next fiscal year.
The change arrives as regional governments prepare their 2027 budgets after the national accounts were finalised last month. The act replaces the previous per-capita grant system with one that factors in local population density and existing infrastructure age, according to the bill text published on the Duma website.
Effects on Moscow households
Under the revised rules, Moscow will receive 2.8 billion roubles less in annual utility support than it did in 2025. City officials have indicated that the shortfall will be covered partly through a 4.5 percent increase in average monthly service charges for households in the Central Administrative Okrug. Residents outside the Moscow Ring Road face smaller adjustments because the formula credits newer district networks.
Local advocates note that the act requires each municipality to publish an annual bill tracker on its website by 1 December. The tracker must list every federal transfer received and the share passed on to residents through tariffs. Moscow’s version will be maintained by the city’s Department of Housing and Utilities.
Comparisons with peer cities
St. Petersburg and Kazan receive higher per-resident allocations under the same legislation because their older housing stock and lower density scores trigger larger top-up payments. Nizhny Novgorod, by contrast, is projected to lose a similar share of funding to Moscow but starts from a lower baseline, so its tariff rise is capped at 3 percent.
The government says the policy will take full effect on 1 January 2027. City administrations must submit their first compliance reports to the Ministry of Finance by 31 March 2027, after which the Duma’s budget committee will review outcomes for all regions.