Bad times for departmental accounts. Communities will spend more than they will collect in 2023, warns the Court of Auditors in a report on community finances published Tuesday, with the departments being particularly concerned.
The departments, whose expenditure is mainly attributed to medico-social action, with for example the payment of Active Solidarity Income (RSA), should see their gross savings, that is to say the difference between their income and their expenses, decrease by 39% this year. The Court carried out its calculations based on the communities’ finances at the end of September and the government’s forecasts in its 2024 draft budget.
A “scissors effect”
Their social spending, and the remuneration of their agents, should increase faster than inflation, calculates the institution, while several department presidents have recently denounced the cost, which they no longer consider bearable for their finances, of Child welfare (ASE).
On the revenue side, the departments will suffer from the sharp slowdown in the real estate market, with a fifth of their revenue coming from transfer taxes for valuable consideration, levied on the sale of a property and included in “notary fees”.
Hence a “scissor effect” on their finances, warns the Court, which recommends reforming the way departments are financed to make it less dependent on economic fluctuations.
Improvements in the municipalities
The regions should see their gross savings drop by 12%: the decline in consumption, which has an impact on indirect taxes (VAT, TICPE) allocated to communities, will weigh on their accounts.
Better off, municipalities should see their savings improve by 21%, while those of intermunicipalities are expected to decline slightly (-3%). They will in particular benefit from the increase in their revenue from property taxes.
All communities should suffer, on a national scale, a deficit of 2.6 billion euros in 2023 then 2.9 billion in 2024. But their investment spending should continue to increase, which will pushes them to draw on their cash flow, after having been in surplus in 2022, or to go into debt.