2023-07-29 10:17:13
BarcelonaCatalunya again received fewer resources in 2021 than the average of the autonomous communities. Although it was the third territory of the State that contributed the most to the regional financing system, it was placed in tenth position – out of a ranking of 15 – in terms of resources received. This situation is reproduced for the twelfth year in a row.
Regional funding 2021
Collection of taxes and revenues from regional governments
This is clear from the settlement data of the regional financing model that the Department of Economy of the Generalitat has made known today. Catalonia was only above what the average community receives in 2009, the first year of application of the current regional funding model. Then it did by 2.3%.
“The data show that Catalonia is once again being harmed by an unfair and outmoded model, since Catalans pay well above the average and, on the other hand, receive below the average”, criticizes the Minister of Economy and Finance of the Generalitat, Natàlia Mas.
Difference between collected and paid money
In euros per inhabitant
Specifically, Catalonia contributed 3,153 euros per inhabitant, which is 17.7% more than the average, while it received 2.1% below the average, with 2,848 euros per capita. Thus, the difference between what was contributed and what was received is 305 euros for each Catalan. It is the highest number since the model was implemented, now 14 years ago.
The better the Catalan economy is doing, the bigger the gap between what it contributes and what it receives”
Guillem López Casasnovas Professor of economics at Pompeu Fabra University
This mismatch between collection and return can be explained by looking at the position occupied by Catalonia in each of the two rankings: it is tenth in terms of revenue received, despite being the third largest contributor. However, if the impact of the cost of living is taken into account, the position worsens and Catalonia falls to fourteenth position, with 2,558 euros per inhabitant, which means the penultimate place and 12.1% less than the average of the set of territories that participate in the common financing regime – Navarre and the Basque Country operate under the regional regime.
In the eyes of Pompeu Fabra University economics professor Guillem López Casasnovas, this phenomenon is explained by the fact that the criteria used by the State are not very sensitive to the Catalan reality. “The better the Catalan economy does, that is to say, the more jobs it creates and the more its fiscal capacity increases, the bigger the gap between what it contributes and what it receives,” he says.
Territorial imbalance
For the Generalitat, these data highlight one more year that the redistribution and leveling mechanisms of the current funding model mean that distribution is not equitable. “While Catalonia is systematically below its contribution, other communities with a much lower than average tax capacity always receive more resources per inhabitant than Catalonia,” he explained in a statement.
In the case of the Community of Madrid, this difference rises to 935 euros per inhabitant, as it receives 17.1% less than the average, which places it at the bottom. However, López Casasnovas remembers that Madrid compensates for this with the capital effect, which means that it has more public and private investments and less dependence on the financing model. “It’s easier for them to digest underfunding, because they can offset it with income from the rest,” he adds.
On the other side of the ranking is Extremadura, which is the second least contributor (1,931 euros), and the one that receives the most, with 4,153 euros per capita, the equivalent of 42.7% more than the average.
A model without revision
The current funding model was approved in 2009 and provided for a five-year periodic review, i.e. in 2014 and 2019, but no update has yet been made. According to the Catalan executive, since then the disparity in the distribution of resources between communities has increased and the imbalance between the total income received by the State and that of the territorial administrations has increased. In fact, between 2012 and 2022 the resources of the State have grown by 88.7%, while those of the communities have only increased by 40.5%.
“It is a model that should have been revised already in 2014 but that no Spanish government, neither of the PP nor of the PSOE, has wanted to touch. Never, since the first regional financing law was approved, has the system been so many years without changes”, criticized Councilor Mas.
The head of Economy has also criticized the “repeated non-execution” of State investments in Catalonia. In fact, the State had to publish the execution data for the entire 2022 budget last May 30, two days after the municipal elections that led to the calling of the general elections for the next July 23 by the president of the government, Pedro Sánchez, but the Ministry of Finance decided to postpone the publication of the data, which are still not public.
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