Hacienda will update financing to deliver 9,000 million more to the communities before the elections | Economy

Hacienda will update financing to deliver 9,000 million more to the communities before the elections | Economy



The Finance Minister, María Jesús Montero, has advanced this Tuesday that is studying how to update by means of a decree the installments on account of the system of financing of the communities so that they can receive around 9,000 million more resources during this year. "We are exploring how to do it without Budgets", said the minister during her speech at an informative breakfast organized by Europa Press.

The autonomies already had to receive just over 104,000 million euros during 2019 for the financing system, according to what the minister herself announced to the finance councilors last summer. But since the economy is doing better than initially estimated, that figure will be updated with an additional 9,000 million. "Until now, only something similar has been done once, in 1996," he recalled.

Montero has acknowledged that he will adopt the decision in a decree that will be approved before April 28, the date scheduled to hold the general elections. "I have always argued that there is no budgetary hierarchy of the State with respect to the autonomous communities," the minister has pledged to argue that the financing system should be distributed independently of the central government's budget cycle. That is to say, the fact that the Government does not manage to approve its General Budgets of the State must not affect the distribution of resources of the autonomies.

Montero explained that although the communities will not be able to benefit from the additional resources that the fiscal measures would provide, such as the increase in income tax and the regularization of VAT through the immediate information system (SII), if the deliveries on account of the financing to "adjust resources to the improvement of the economic cycle".

The financing system of the autonomous communities is complex, not very transparent and, sometimes, its application is not very effective. The distribution is done as follows. In the middle of each year, on the month of July, the Government communicates to the communities the amounts that will receive the next one from the financing system. It is an approximation so that regional administrations can begin to elaborate their Budgets with an income forecast. Months later, around the spring of the following year, the central executive with a more real forecast of resources (the year has already started and sees the economy moving) updates the deliveries on account. This is precisely what Montero wants to do now so that the communities have an additional 9,000 million.

But the cast does not end here. Two years later, when the financing system is definitively closed -the intervention has already reviewed and taken as good the income obtained- the system is fixed. If the State has given less resources than it should, it makes an additional payment to the communities (this happens when the economy grows) and, conversely, if it has given more resources than the communities were entitled to, it demands the return (usually happen in times of recession). The latter was what happened in 2008, 2009 and 2010. When the autonomies had to return billions of euros to the State. In order not to disregard the regional accounts, the PP government allowed them to make these returns in convenient terms.

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