The economic downturn, which spread across the majority of Ukraine's economy sectors over 2H2008 has lastly affected fulfillment of local budgets by local governments. The growth in unemployment and decreasing salary fund, deteriorating solvency of communal companies have definitely had a negative impact on revenues of the local budgets. Under such circumstances the local governments will face a challenge of maintaining funding the budget programmes for securing the functions of municipal infrastructure and social guarantees to employees of budget-funded institutions. Beyond that, a shift to severe cost savings of budget funds prompts difficulties for serivicing and repayment of municipal debt obligations. Effects from fulfillment of the budget in 2008