The article is devoted to the problems of inter-budgetary relations at a municipal level. The best municipal region in this respect is Surgut of HantyMansiysk Autonomous District, which was chosen to observe the inter-budgetary relations. Observance and analyses of the situation there showed that taxes which make up the local budgets had been reduced groundlessly. The article holds that the budget regulation which provides that a part of the finances should be returned to the municipal regions as subsidies, subventions, and financing  mission-oriented projects, is, essentially, a sort of mechanism for the state authorities to press local administration economically, contradicts the Constitution of the Russian Federation, with both social and economic negative consequences ensuing. The article has suggestions and recommendations how municipal inter-budgetary relationship be improved.