In 2019, the communities improve their finances

After a good year 2018, the municipalities, departments and regions should further improve their financial situation by 2019, according to the first observation

In 2019, the communities improve their finances

After a good year 2018, the municipalities, departments and regions should further improve their financial situation by 2019, according to the first observations of the general Directorate for local authorities (DGCL). Their gross savings (difference between their spending and revenue) is expected to increase by 11.2 %, following 5.6% in 2018. This good result is explained by a double phenomenon. First, the communities are expected to see their operating expenses grow by only 0.4%, after 0.3 % last year. "This moderation comes from, as in 2018, as much of the stagnation of operating grants that the control of personnel costs," reports the DGCL. Personnel costs will increase slightly (+ 1.1 percent). "The decline in expenses related to assisted contracts would continue in 2019, offset by an increased use of other types of contracts," notes the DGCL. As regards the expenditure of intervention, they would decline slightly (by 0.1 %) due to a decrease in subsidies to the private sector.

at the same time, the operating revenue of the communities to rise faster than expenses (+ 2,1 %), "because of the tax revenue structurally less elastic". In the clear, even if the spending is controlled, taxes do not decrease. In addition to grants from the State stable, the revenues of the taxes would remain in effect dynamic. One example: the basics property taxes are expected to grow 2.5 % this year. Taking advantage of this good financial health, the communities would increase their largely investment (+ 8.5 percent). A normal phenomenon at the end of an electoral cycle: investment spending are low in the beginning of the mandate, the time to launch the sites, and then accelerate. Yet, they have been particularly low in recent years due to reductions in staffing made under François Hollande.

Updated Date: 18 September 2019, 00:00

Kathleen Lees

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