In the process of budgetary regulation and financial equalization of the development of territories an important role is played by intergovernmental relations, that arise between budgets of different levels. The transfer mechanism of the distribution of budgetary resources provides a balance between the revenue and expenditure part of local budgets. Implementation of fiscal decentralization improves intergovernmental fiscal relations, which is ensured by horizontal alignment of the income and expenditure part of local budgets and guarantees their financial autonomy.