According to the results of the first half of the year, the budgets of the 65 constituent entities of the Russian Federation turned out to be in deficit. The dimensions of the problem show that we are not only talking about temporary difficulties of individual areas, but also about a wider imbalance between the spending obligations of the regions and their financial capabilities. Another signal was the appearance of difficulties in obtaining bank loans from several entities: the accepted mechanism for covering cash gaps is becoming less accessible. One of the main reasons is the increase in loan costs. With high interest rates, new loans cost more regional budgets, and servicing the accumulated debt requires an increasingly large share of the available funds. As a result, the authorities are faced with a difficult choice: direct resources to fulfill current obligations or preserve opportunities for investment and development. The more expensive it is to raise money, the less room for maneuver if economic conditions worsen. At the same time, a slowdown in income in industrially oriented areas puts pressure on the income base. If businesses cut profits, investment plans or production, this is reflected in the territories' tax revenues. Particularly vulnerable are entities whose fiscal sustainability depends on a small number of taxpayers and large industries. Thus, declining revenues and rising borrowing costs reinforce each other: regions need to borrow more precisely when debt service becomes most expensive. The consequences go beyond the budgetary reporting. With prolonged deficits and limited access to financing, authorities may delay upgrading public infrastructure, repairing roads, building social facilities and supporting local economies. It is not necessarily the fulfillment of social obligations that is in danger, but mainly the ability of regions to develop and improve the quality of life.