Castilla-La Mancha will maintain a spending ceiling below 8,000 million despite "the temptation" for the electoral year

The non-financial spending limit will remain below 8,000 million euros in Castilla-La Mancha during the next year 2023, as announced by the Minister of the Treasury, Juan Alfonso Ruiz Molina.

The Governing Council has given its approval to the figure of 7,554.3 million euros, "almost the same as this year", with a slight reduction of just over 22 million euros compared to 2022.

Ruiz Molina assures that the decision on the spending ceiling is the result of "rigor in the government's action" and that it has been taken "with the utmost prudence so that what we spend is in line with income." The head of the Treasury also affirms that despite the fact that 2023 is an electoral year, the level of spending will be carried out with “responsibility”.

The counselor also explained that a deficit of around 0.3% of GDP will be incurred. Ruiz Molina has assured that the Government of Castilla-La Mancha is going to stick to the percentage set by the central government, "something that we did not do for the 2022 budget because, if we had respected the Ministry's recommendation that year, we would have had to undertake cuts".

And it is that, he has recognized, in an election year, “the temptation of any government may be to increase spending capacity, but we have decided to undertake a debt reduction of more than 70%. It does not seem appropriate to increase the debt in an autonomous community in an economic context like the current one, because it would have repercussions in successive years” and he has assured that the regional Executive is “committed to financial orthodoxy”.

Despite this, he believes that spending will allow "guaranteeing the commitments made to citizens" and he has not forgotten to repeat that "tax pressure remains frozen, according to social agents" and that "we are one of the autonomous communities with less tax burden”, at the insistence of the Popular Party that, for months, has been asking to lower taxes in the region.

He has also alluded to "national accounting adjustments" and specifically to the fact that "there is a change in the accounting of REACT funds", which marks the European Commission and "due to the delay in the approval of European operational funds with a horizon of 2027".

Non-financial own income

As for non-financial own income, the Treasury estimates that it will reach 7,234 million euros in 2023. "It is a very important variation of 23%," said Ruiz Molina. 85% of the income will come from the regional financing system and includes payments on account and the settlement for the year 2021. "In 2022 the settlement was negative (-350 million euros)", he clarified.

The rest of the income will come both from the assigned taxes, and from subsidies from other public administrations (the interterritorial compensation fund or the European structural funds) and the REACT or the extraordinary mechanism that has been operating since 2020 due to the pandemic for which Castilla- La Mancha will receive a total of 392 million.

"The goal is for the 2023 budgets to come into force on January 1"

The non-financial spending ceiling proposal will now be transferred to the Cortes of Castilla-la Mancha for debate and subsequent approval since it is, recalled Ruiz Molina, a prerequisite for the presentation of the draft Regional Budget Law for the next year. "The goal is to enter into force on January 1."

In fact, today the articulated text of the new budgets has been sent to the Consultative Council of the region. At the moment it is an estimate, but the Treasury advances that the budget figure “could be similar” to that of this year, which amounts to 12,273 million euros, including financial expenses.

It remains to be seen how much the final grants from the State will amount to, as well as the resources corresponding to the Recovery and Resilience Plan (the recovery funds linked to the pandemic) that must come from the different ministries.

Ruiz Molina has also explained that, "according to the estimates of the technicians and also according to the information received in the Fiscal and Financial Policy Council", in 2023 the fiscal rules that require meeting specific deficit objectives will continue to be suspended. "It will not have to be fulfilled" and that allows more margin.

The definition of the 2023 budgets is also pending knowing the resources from the regional financing system, as well as the payments on account of the two previous years.

However, the counselor has already set goals for the accounts for Castilla-La Mancha in 2023. They will go through continuing to boost economic activity, with measures for families and the most vulnerable sectors in the face of uncertainty and inflation, through a commitment to public services, the promotion of the ecological transition and digital transformation, via Next Generation-EU funds, as well as for adopting active policies against the demographic challenge in a transversal way“.

Those of 2023 will be the last regional budgets of the legislature and, according to Ruiz Molina, "an effective instrument to generate wealth and employment."