30 million to balance their investments

Him The Island Council resorted to a bank loan again four years later –and no less, than 30 million euros– being able ‌to level the investment effort foreseen in the record budgets of ‍181.5 million presented for next‌ year. This is an accounting ‌forecast – no loan⁤ has been signed yet ‌– and the The institution’s objective is not to have to use this maximum ‍amount.​ It is expected to take advantage of the institute’s healthy financial situation to be able to ⁣carry out the planned actions using‍ the savings accumulated in previous years, although it is not clear‌ whether it will be able to do so, given that in 2025 the budget stability ⁤objectives⁣ and the ⁤the ⁣so-called spending rules, which limit the use that can be made⁤ of the remaining Treasury.

Last⁢ year, in the first budgets prepared by Adolfo Vilafranca’s new government, a loan ⁢of the same amount, 30 million, was already included, but the accounts did not ‌move forward -Vthe ox felled them after‍ the breakdown of the‌ right-wing coalition– and no credit was⁤ signed during the current year. Since 2020, then with the tripartite PSOE, Més per Menorca and Unidas Podemos at‌ the head of the Consell, no ‌budgets have been approved that⁤ make use of new debt to balance‍ the accounts. So it was 2.9 million euros.2021 was the first year in which the institution ⁣was​ freed from bank charges and since then the amortization and interest expense chapter has continued at zero.

the economic-financial report accompanying the budget⁢ project that the PP minority government will try to test in the coming weeks highlights‌ that‍ the economic boom⁢ that the Consell is experiencing – largely due to the low level of execution⁣ of​ investments​ planned ⁢in fiscal ‌years past⁤ – allows the institution to deal with new debt in full compliance with the relevant legislation. Not in vain, The settlement for the year 2023 highlights a positive difference between recognized⁣ rights ‍and obligations equal to 20.9⁣ million and in ⁢recent years the evolution​ of⁤ net​ savings has always⁤ been positive, with no forecast that ‍this trend will be interrupted in 2024.

It must be taken into account that in next year’s budgets the Consell expects to receive less from its main source of financing, ‍ the Government, which⁤ will transfer a total of 70.75 million, 4.9 less than in 2024 and ‌10.3 million less than what was shown in the 2023 accounts. It is expected that this decline will ​be even ⁢greater ‍given that Consell has foreseen in its accounts for the year 2025 the arrival of a sum of 9.9 million ⁤euros from the ⁤community to cover investments in the main motorway and that in the end ‌no more‍ than four million: of ‌the 40 ‍million allocated by ⁢the government for this project, it has already allocated 36 to mallorca ​and Ibiza. Vilafranca warned during the presentation ⁤of the budgets that if they did ⁣not have enough‍ money he would turn to the remaining treasury and, if he could not, ‍to bank loans.

The Consell’s limited financial​ autonomy: only 3.7% of its revenue

How can local authorities improve their financial management to ⁢avoid excessive debt?

Interviewer: welcome to time.news! ⁢Today, we⁣ have a special guest, Dr.Elena Marin, a financial analyst with extensive ⁣experience in public⁣ finance. Dr. Marin, thank you for joining us!

Dr.Marin: Thank you for⁤ having me! It’s ⁣a pleasure to be here.

Interviewer: Let’s dive right in. We⁣ recently observed that the Island Council​ has resorted to taking a bank loan amounting to⁢ 30 million euros, just ​four years after a previous loan. What does⁣ this indicate⁣ about​ the CouncilS financial health?

Dr. Marin: This situation raises several red flags. ‌Resorting to​ a notable loan so soon can suggest that the Island Council may be struggling to manage its budget effectively. It ⁢could be ⁣a sign ‌of recurring deficits,⁣ or it might indicate that previous ⁢loans were used ‌to cover operational costs rather than investing⁤ in enduring growth.

Interviewer: That’s a⁣ critical point. In your ⁢opinion, what ‌factors⁤ could lead a regional body ⁢like the Island Council‌ to repeatedly​ resort to borrowing?

Dr. Marin: There can be multiple factors at play. First, economic downturns or ⁢shifts in ‍tourism revenue—critically important for many ⁢island economies—can severely impact cash flow.⁣ Additionally, mismanagement of funds⁤ or the inability to ⁢generate sufficient local revenue ⁤through‍ taxes could necessitate further borrowing. It’s also worth noting that if the ⁤Council has large ongoing projects that require‍ upfront funding, they may find themselves in a cycle of​ debt to finance these initiatives.

Interviewer: Given these challenges, how should the island Council approach ⁤this‍ borrowing strategy moving forward?

Dr. Marin: The Council needs to adopt a more strategic approach. They should ‌focus on creating a sustainable budget that accounts for both revenues and expenditures realistically. Implementing strict ​financial controls and possibly revisiting project priorities could free up funds for debt repayment. Exploring alternative revenue streams,‌ such as ⁣enhancing tourism ‌experiences‍ or investing ‌in local businesses, might ‍also help reduce their ⁢dependency on borrowed funds.

interviewer: Engaging! ‌What role do you think public accountability plays ⁢in this ​scenario?

Dr. Marin: Public accountability is‍ crucial, especially when ‍large sums like ⁤30 million euros are involved. The ‍community has the right to know how ⁢the funds will be used and the ​long-term plan for financial sustainability. Transparent ‌reporting and involving citizens in budgetary decisions can‍ foster trust and ensure that borrowing is viewed as a ‍necessity rather than a habit.

Interviewer: Those are valuable insights. As we wrap up, what ​advice woudl you give to local governments facing⁤ similar financial dilemmas?

Dr. Marin: ⁢I would advise local governments to prioritize ⁣financial literacy and proactive budgeting. Establishing a clear financial policy that includes ⁢contingency planning for unexpected downturns can also‍ be beneficial. Ultimately, fostering economic diversification will lessen reliance on loans and ensure a more stable fiscal future.

Interviewer: Thank you, Dr. Marin, for‍ your insights today.⁤ It definately seems like the island Council has a‍ challenging road⁤ ahead, but with ⁣the right strategies, ⁢they can pave ⁢the way for a more sustainable future.

Dr. Marin: Absolutely! Thank ‍you for having me.It’s​ been a‌ pleasure discussing these important issues.

Interviewer: And thank you​ to our audience for tuning in. Until next time, stay informed ​with ⁣Time.news!