Lhe presentation of the 2025 finance bill (PLF) confirms the major participation of communities in the effort to restore public accounts. The government is planning a 5 billion euro levy on community revenues through, in particular, a mechanism known as “precaution” targeting 450 communities and a freeze in VAT revenue allocated at the local level.
All local authorities, without any real consideration of the quality of their management or the specificity of their territory, will therefore have to make do with (much) less without any real capacity to organize themselves to do the same, if not better. While communities themselves are in the process of preparing their budgets, how can they cope? Let us first recall that the financial management of local authorities clearly differs from that of the State by the strict application of a budgetary golden rule, which prevents any community from voting a budget in deficit.
Communities go into debt, but this loan cannot under any circumstances finance current operating expenses such as the remuneration of their agents. Let us also reaffirm the power of local public action in its capacity to produce and embody a local public service that users and voters across the entire territory rightly demand.
The weakening of decentralization
Should local authorities, however, remain aloof from the financial effort and the objectives of greater efficiency of public action? No, on condition that we dissociate the defense of public action from the defense of public employment, and break with the institutional logic which aims above all at the survival of local public structures.
By losing their financial autonomy under the effect of successive transfers of local taxation, of which the abolition of the housing tax is the latest episode, communities have lost the capacity to balance their revenue and expenditure. When the majority of their resources come from state grants, it is no longer possible for communities to free themselves from the financial challenges of the state.
We can of course regret this movement which weakens decentralization, or even calls it into question if we consider the constitutional guarantee of local financial autonomy, but it must be noted that this shift in fact involves communities in the financial problems of the ‘State.
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