The Ministry of Finance presented this Friday, an issue that had been pending since 2014. The new scheme represents an evolution of the current model rather than a revolution: there will be more money for all the autonomies, a greater transfer of taxes and a reduction in the financing gaps between territories.
Catalonia, the leading voice in the negotiation of the proposal, will benefit, but not all of its claims will be recognized. There will be no quota as initially proposed, which is why Junts has expressed its rejection of the new model, nor will the principle of ordinality be completely protected, although it will be guaranteed for Catalonia at the start of the new model. These are some of the key points of the reform proposal.
Adjustments to the distribution criteria
The Treasury proposes methodological adjustments in the main variable of distribution of the system’s resources. This indicator corresponds to the real population of each territory, weighted by variables that influence the cost of providing basic public services—a task entrusted to communities—such as aging or geographic dispersion.
Among the new features, two new criteria are introduced in the educational variables, the number of inhabitants between 18 and 24 years old and displaced university students; In the social services section there will be two sections, the population over 65 years old – up to 79 and over 80 – and the number of unemployed without benefits. Improvements are also planned for the most depopulated communities.
Tax transfer increases
The current model is based on a common basket of resources that is nourished by state transfers and part of the collection from the communities, which have been assigned the . These percentages would rise to 55% and 56.5% for the first two taxes, and will remain at 58% for the third. 100% of the wealth tax, bank deposit tax, gambling activity tax and waste tax will also be incorporated into the shared fund. The modification will provide, according to the calculations presented this Friday by the first vice president, María Jesús Montero, some additional 16,000 million for the first year of operation of the new system, 2027. The State contribution will rise to 19,000 million in the same year, compared to nearly 13,000 million in 2023. In total, the model will have some additional 21,000 million.
The ministry has not offered data on how much adjusted per capita financing would grow in each community, but has detailed the absolute increase compared to the current model. The greatest increase would be registered in Andalusia (4,846 million more), followed by Catalonia (4,686 million), Valencian Community (3,669) and Madrid (2,555).
Simplification of funds
This common basket (called the Fundamental Public Services Guarantee Fund in the current model) is currently distributed based on the adjusted population, but then other compartments come into action that, according to experts and academics, are not very transparent and distort the distribution.
These closing funds would disappear with the reform, and the new model would guarantee a decrease in through horizontal and vertical leveling—from the current 1,500 euros to 700—. The first leveling, between communities, has the objective that all territories reach 75% of the average adjusted resources per inhabitant; The second, between the State and autonomies, aims to reduce by two thirds the distance between each region and the one with the most resources.
Additional settings
The reform contemplates additional adjustments. On the one hand, it allows communities to collect part of the VAT generated by SMEs in their territory, calculated based on the difference between the relative weight of the VAT settled and the consumption index. A climate fund with 1,000 million euros is also incorporated. Two thirds of this will be distributed based on the adjusted population criterion among the Mediterranean communities, the most exposed to extreme weather phenomena; The rest will be distributed among the others based on the adjusted population.
On the other hand, so that no community loses resources with the new model. Thus, Cantabria and Extremadura, among the territories best treated by the current system and that would not improve their financing with the reform, will also receive an extra injection of resources.
Half Ordinality
The controversial principle of ordinality will not be protected by the new system. The Government has squared the accounts so that it applies to Catalonia, as it had agreed with ERC. Ordinality implies that if a community is the one that contributes the most to the system, it should occupy the same position in terms of resources received. Catalonia, a net contributor along with Madrid and the Balearic Islands, received financing per inhabitant around the average. Now it has been guaranteed that, at least at the start of the new scheme, it will be the third autonomy that contributes the most and also the third that receives the most, but this correspondence will not apply to the others. The configuration of a Catalan quota, as initially proposed by the pro-independence groups, remains on deaf ears.
