Autonomous funding makes strange bedfellows

Negotiations on regional financing have always led to strange bedfellows. Many times leaving aside the affiliation to a political party, the regional presidents end up weaving alliances between those who share criteria so that the design of the model and the distribution of state transfers fall on their side.

That is why it is not strange to see the president of the Valencian Community, the socialist Ximo Puig, joining forces with that of Andalusia, Juanma Moreno (PP); or to Galicia, Alberto Núñez Feijóo (PP), doing the same with the socialist president of Castilla-La Mancha, Emiliano Garcia Page; or the Balearic president, Francina Armengol (PSOE), seeking to unite energies with the independentistas of the Government of Catalonia of Pere Aragonés, in defense of interests that, to some extent, the popular leader of Madrid also shares, Isabel Diaz Ayuso.

Facing the next negotiations for the new regional financing model, the former are joined by the claim of the historical debt after years with a sub-par system resource allocation. The latter share the demand for a criterion that takes into account the greater cost to provide services among the inhabitants disaggregated from Spain depopulated. For third parties it is a common demand that of the ‘ordinality principle’: avoid that, being those who contribute the most to the solidarity system, they fall to the last positions in terms of financing per inhabitant.

Infra financing

In a recent appearance before the plenary session of the Congress of Deputies, the Minister of Finance herself, Maria Jesus MonteroShe referred to the three autonomy alliances that she herself perceives, after the meetings held with their representatives. On the one hand, he perceives a group made up of Andalusia (PP), Murcia (PP) y Valencia (PSOE), who defend a reform that evens out the differences in the current system. Hence the meetings in recent weeks between the presidents of these three communities.

Adjusted population

For its part, Galicia (PP), Asturias (PSOE), Cantabria (PRC), The Rioja (PSOE), Castile and Leon (PP), Estremadura (PSOE), Castilla la Mancha (PSOE) and Aragon (PSOE) unites them with the criterion of facing with greater intensity the demographic challenge and for this reason they demand to take more into account the dispersion of the population in the cost of providing essential services, such as health and education. These communities are especially attentive to the definition of “adjusted population” that the new model must incorporate. This concept determines the distribution of 70% of the funds of the autonomous financing system. Aware of the interests that unite these eight communities, the Galician Núñez Feijóo (PP) invited the other seven presidents to a meeting on November 2, which was then postponed to the 23rd and that runs the risk of being deflated if finally ends up imposing the logic that confronts the two majority parties (PP and PSOE) over territorial affinities.

Ordinality

Madrid, Balearic Islands and Catalonia They have in common the request for the ordinality principle, according to which these richest communities should contribute resources to the common stock market but only to the extent that this does not mean that the receiving autonomies are better financed than themselves. It is what is also known as “put limits on solidarity” between territories. Madrid is the first community in resources per inhabitant, the Balearic Islands is the second and Catalonia is the third. However, Madrid is the seventh in financing per inhabitant; Catalonia is the tenth and the Balearic Islands occupies the 15th place, and it becomes the community that receives the least funding per inhabitant from the system among the 15 autonomies of common regime, according to the data of the 2019 settlement.

Fiscal harmonization

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The three communities (Madrid, the Balearic Islands and Catalonia), which coincide when it comes to the principle of ordinality, however disagree if it is a question of advancing in a certain fiscal harmonization, with the determination of a minimum taxation in taxes such as heritage and inheritance. The president of Madrid is a firm defender of the fiscal autonomy of the community, advocates lower taxes and rejects any attempt at harmonized minimum taxation. On the contrary, the Catalan formation ERC, which co-governs in Catalonia, started a commitment to harmonize the Minister of Finance. The socialist president of the Balearic Islands, for her part, assumes the thesis of her party in favor of a certain fiscal harmonization between autonomies and against “fiscal dumping” that, according to the PSOE, Madrid practices.

When it comes to this principle, previous affinities are also broken, such as those of the Valencian Community and Andalusia, whose presidents exhibit antagonistic theses regarding a possible tax harmonization, promoted by Ximo Puig (PSOE) and rejected by Andalusia and Murcia (PP).