DSince the death of Gaston Defferre in 1986, local elected officials, both from the majority and from the opposition, have been left orphans of the only truly decentralizing minister in history, the one who, with the law of 2 March 1982, had attempted to break with eight centuries of administrative centralization undertaken by Philip Augustus (1165-1223) with the bailiffs and seneschals, ancestors of the current prefects.
Over the last twenty-five years, successive governments have dismantled much of local taxation, eliminating regional transfer taxes, departmental stamps, professional tax, tax on principal residence, value-added social security contributions such as local tax, do not mention the division of industrial companies’ land bases into two.
With this set of texts, departments and regions no longer have the slightest margin for fiscal maneuver. as for the Municipalities, if they can still collect the tourist tax from visitors who spend a night on their territory, the stay of a resident who spends there 365 days a year becomes free.
This debate between central and local authorities has been heating up since the summer, with Bercy questioning the responsibilities of the municipalities in the announced drift of public finances, which would go from a forecast deficit of 4.4% of GDP to 6.1%. estimated in 2024.i.e. a projected gap of over 50 billion euros…
Different accounting rules
If national financial accounts consolidate the budget results of three public administrations (central, social and local), they do not obey the same accounting rules, which is regrettable in a modern country. in the 2025 finance law, currently under discussion in Parliament, the state’s operating deficit amounts to 106 billion euros, meaning that two thirds of its staff are paid through debt. Furthermore, the State does not make any provisions for depreciation on its fixed assets, as if its vehicles and computers had an infinite lifespan…
Conversely, communities, apart from the fact that they have to devalue their movable assets like businesses, can only resort to borrowing to finance investments and, furthermore, cannot repay the principal of their debt by taking out new loans. If the State itself respected the budget rules it imposes on communities, it would have to add as many as 276 billion in additional taxes to the 2025 budget law, or, to give an order of magnitude, increase the ordinary VAT rate from 20% to 20%. 46%!