The income received by the community Catalonia of the regional financing system remain slightly above the average. Meanwhile, territories like Andalusia, Murcia or Castilla-La Mancha not only are they still below the average funding per inhabitant, but they are also losing positions, waiting for a reform of the model that the current coalition government has already given up on undertaking in this legislature.
The Ministry of Finance published at the end of July the data of the final settlement of regional financing corresponding to 2020. The analysis of these data released this Tuesday by the Applied Economics Studies Foundation (Fedea), highlights the relative improvement in 2020 of communities such as Catalonia in the distribution of regional financing cake and the worsening of some territories that already started from a level of underfinancing.
Above or below average
According to the definitive settlement for 2020, the income per inhabitant assigned to Catalonia (2,604 euros) was slightly above the average (2,555 euros). In particular, the financing per adjusted inhabitant (a concept that takes into account factors such as geographical dispersion or the degree of aging) corresponding to 2020 stood at 101.9 points in Catalonia, compared to a mean of 100 (almost 2% above the mean). According to Fedea’s analysis, Catalonia not only remained above average in 2020, but also achieved a slight relative improvement of six tenths compared to 2019, when the system’s resources per adjusted inhabitant represented 101.3 points over one point starting at 100.
In total, according to the data analyzed by Ángel de la Fuente, from Fedea, seven autonomous communities improved their participation in the financing system in 2020. This was the case for the territories of Catalonia, Galicia, Asturias, Valencian Community, Aragon, Extremadura, and Castilla y León. However, another eight communities reduced their participation in the cake of the regional financing system: Andalusia, Cantabria, Murcia, Castilla La Mancha, Canary Islands, Balearic Islands and Madrid. The communities of Basque Country and Navarra they have their own regional funding regime and are outside the common regime.
In addition, there is the circumstance that three of the communities that have regressed –Andalusia, Murcia and Castile-La Mancha– They already started from a very unfavorable situation, of underfinancing, since the resources per inhabitant assigned to them by the current regional financing model are below average. The Valencian Community it is also underfunded (93.1 points out of an average of 100), however this autonomy achieved a slight improvement in 2020.
Where is the most collected?
Fedea’s analysis points to Catalonia as the third autonomous community that collects the most taxes per inhabitant (behind Madrid and the Balearic Islands), although it ranks ninth when it comes to income received from the regional financing system.
In accordance with the mechanisms of the regional financing model, Madrid (7,735 million), Catalonia (1,869 million) and Balearics (196 million) contributed in 2020 a total of 7,800 million in favor of the rest of the communities to level the quality of the services provided in all of them. Madrid falls to tenth position when it comes to financing system resources per inhabitant while the Balearic Islands ranks fourth.
extraordinary resources
In general, the financing cake that the autonomies had to distribute under 2020 was reduced significantly. According to Fedea’s analysis, the total volume of the definitive financing of the autonomous communities of the common regime experienced a drop of 11,200 million (9%) in 2020 compared to 2019 due to the poor evolution of regional and state tax revenues as a result of the covid crisis.
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This fall, however, was more than compensated by an injection of extraordinary resources by the State for an amount of 19,600 million. This amount includes 4,400 million euros that the communities had to return to the State and that the State forgave them as well as the covid background (15,207 million).
If these extraordinary transfers of 19,600 million are included, the average financing per adjusted inhabitant corresponding to 2020 rises to 2,996 euros, according to Fedea’s calculations (compared to the starting figure of 2,555 euros derived from the regional financing system). Catalonia’s participation rises in this ‘extended pie’ to 103.2 points (out of an average of 100). The injection of extraordinary resources, however, failed to get Andalusia, Murcia, Valencia and Castilla La Mancha out of the sack of underfinancing.