In August 2026, general fund revenues of local budgets, excluding intergovernmental transfers, totaled UAH 55.8 billion—a 19% increase compared to August 2025. Growth rates were 2.3 times higher than the annual inflation rate of 8.1%. In 12 regions, revenues grew faster than the national average, as the local revenue base of communities continued to expand despite high security risks. These findings are detailed in the August 2026 Municipal Review, prepared by the KSE Institute in collaboration with KSE University. Personal Income Tax (PIT) remains the largest source of local budget revenue, accounting for 52.3% of general fund revenues excluding transfers. In August, it generated UAH 29.2 billion, up 20.8% from last year. Single tax revenues reached UAH 8.2 billion (up 14.9%), while land payments totaled UAH 4.7 billion (up 10.1%). Excise taxes brought in UAH 3.5 billion, an 11.6% year-on-year increase. The fastest growth was seen in real estate tax revenues, which rose 54.6% to UAH 1.4 billion, partly due to individual payment deadlines and an expanded tax base. State budget support also increased. In August, the volume of transfers to local budgets was 3.6 times higher than a year ago. Nearly UAH 2.3 billion in additional subsidies were distributed among 179 community budgets and five regional budgets in war-affected areas. The educational subvention rose by 36% following a 30% teacher salary hike at the start of 2026, while the basic subvention increased by 20.5%. Meanwhile, 999 local budgets received UAH 2.6 billion in basic subventions, while 207 budgets transferred UAH 1.6 billion in reverse subventions to the state budget—23.9% more than in August 2025. Regional policy is gradually shifting toward a model where support depends on territory type, needs, and project readiness, aligning with EU cohesion policy principles. The 2026–2027 Government Action Program includes a dedicated support package for frontline territories, followed by tailored approaches for other territory types, the refinement of horizontal equalization for local budgets in 2026, and the transition of the State Fund for Regional Development to three-year planning. Recovery funding is also expanding: over UAH 4.9 billion is allocated under the “Ukraine Recovery III” program, and 2026 funding for the “Ukraine Recovery” program was increased by UAH 1 billion to nearly UAH 2 billion. The number of projects approved by the European Investment Bank under this program rose from 138 to 163. Security pressures continued to mount. August saw 4,096 recorded air and drone attacks, as well as artillery, mortar, and missile strikes—up 5.9% from July and 80.5% from August 2025. Compared to August 2024, the number of attacks increased 2.7 times. Air and drone strikes accounted for 87.2% of all incidents (3,572 attacks), while artillery, mortar, and missile strikes decreased by 2.8% compared to July, totaling 524. The ten most-attacked communities accounted for 1,408 attacks, or 34.4% of all recorded cases in Ukraine-controlled territory. The highest number of attacks was recorded in the Darivka community (279). While damage to civilian infrastructure decreased compared to July, it remained significantly higher than last year. In August, 858 such cases were recorded in communities—10.4% fewer than in July, but 137.7% more than in August 2025. Housing accounted for 622 cases (72.5% of the total), energy infrastructure for 145, education for 57, and healthcare for 34. Nearly 70% of all damage occurred in the Kharkiv, Sumy, Donetsk, and Dnipropetrovsk regions, with frontline communities accounting for 693 cases, or 80.8% of the total. Communities continue to pool resources, provide joint services, and attract external support. In August, 14 inter-municipal cooperation agreements were added to the register: nine concerned joint projects, three involved the transfer of specific tasks along with resources, and two focused on the joint maintenance of municipal institutions. International cooperation is also growing, with 16 Ukrainian communities signing a memorandum with the European Association for Local Democracy.