Without these adaptations, the investment expenditure planned by Anne Hidalgo’s teams will not be “sustainable”, judges the Regional Chamber of Accounts of Île-de-France in a report.
Alerts on the state of the accounts of the city of Paris are multiplying. Quoted by The echoes and The world , an observation report from the regional chamber of accounts (CRC) of Île-de-France points to the delicate budgetary situation of the capital, led by Anne Hidalgo since 2014.
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Covering the 2015 and following years, this report criticizes a management that inflates the city’s debt. Paris “had an investment that was too high in relation to his financial capacities, which caused him to resort to a lot of borrowing“, notes the CRC. In January 2021, the public accounts had revealed a debt of 7.7 billion euros, up sharply (+ 12.6%) over one year, and which has almost doubled since the arrival in power of the former deputy by Bertrand Delanoe. Part of this increase is explained by the health crisis, which caused revenues to collapse, unlike expenses, which have jumped.
If investment spending is high, gross saving isstructurally too weak“, worries the CRC. Especially since international tourists have still not returned and the city has major planned expenses, such as those related to the 2024 Olympic Games. In addition, there is no question for the moment of increasing local taxes: the margin maneuver is, in fact, limited.
By 2026, the adjustment of the accounts will be “gradual, albeit slow“says the report. As a result, the city would only return that year to a debt reduction rate of less than twelve years, in other words, the “alert threshold» fixed by the State. The magistrates therefore plead for “major efforts to control management expenses“, in order to control the soaring debt of the city of Paris. Without this, the increase in investment expenditure will not be “sustainable“, warns the report.
Anne Hidalgo’s team assumes its policy
The financial management of Paris has been the subject of criticism for several months. The local opposition is sounding the alarm and even calling on the state to put the city under guardianship, in order to restore order in the accounts. For the time being, this track is not mentioned in the CRC report, but Bercy has toughened its tone: at the end of November, Olivier Dussopt and Jacqueline Gourault had sent a letter to Anne Hidalgo, warning her that the derogatory authorization in in terms of capitalized rents from which the municipality benefits would not be renewed after 2022. This allows Anne Hidalgo’s teams to ask social landlords to pay all the rents due over several decades. But this one is “constituting a budgetary risk of headlong rush in that it makes it possible to circumvent the golden rule of the balance of the operating and investment sections”, warned the two ministers in the missive.
In her response to the CRC, Anne Hidalgo writes that she “shares the need to continue management efforts and the need to rebuild gross savings to the same level as before the crisis“, but warns that she intends to maintain”the volume of investments“. Quoted by The world, the city councilor defends his political choices and returns the ball to the government, which limits its support for the community, “going for Paris until the total disappearance of the overall operating grant in 2023“. And, to echoes, the Deputy Mayor in charge of Finance, Paul Simondon, replies that the team in place is committed “to invest massively to maintain and develop a quality public service, to adapt the city to the ecological transition, for solidarity and housing. And we assume these choices“.
In the meantime, the debt of the capital weighed, at the end of December 2020, some 3498 euros per inhabitant. The budgetary arm wrestling continues, but this new report, which must be discussed at the next Paris Council, from February 8 to 11, puts the question of the management of the capital back in the spotlight. Now in the campaign, Anne Hidalgo must deal with recurring attacks from the opposition, from the right and from the government, on this thorny issue: the next Paris council therefore risks being the scene of explosive exchanges.
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