Basic issues regarding financial provision of the local government including the town of Elista are discussed in the given paper; it is noticed that the major part of the local budgets subsidized. Thus, specific weight of the financial aid in the structure of the budget revenue of Elista amounts to 45–60%. Social significance of local budgets is emphasized, which is proved by the structure of expenditures. The total expenditures for education, public health services, social policy and municipal services take 90% of the total sum of expenses. On the whole, unsatisfactory financial condition of the local finance system proves necessity to upgrade the system of interbudgetary relations and financial municipal base consolidation.