The finances of the departments are “heavily impacted” by the draft budget for 2024, with 2.5 billion euros in additional spending decided by the government but partially compensated, Departments of France (DF) warned on Thursday.
Mechanical increase in the RSA, an inflation index, which generates 500 million euros in additional expenses for the departments, increase in the index point of civil servants, fire bonuses, etc.
Two thirds of expenses are taxed by the state. They are permanent, for the most part countercyclical, namely that they increase when the economic situation is unfavorable (…), which will lead to a dangerous and potentially fatal scissors effect for the 12 to 15 departments already in great difficulty, warns François Sauvadet (UDI), president of Departments of France, in a press release.
Departments of France is a pluralist association which brings together the presidents of the 102 member authorities, including 95 departments and 7 local authorities with departmental jurisdiction.
Added to this are cyclical effects, such as the increase in energy costs and the price of raw materials, or the reduction in transfer taxes for payment (DMTO) paid for each real estate transaction, which fell by 18% due to the turnaround in the sector but represent 20% of resources.
APA (personalized autonomy allowance) expenditure is also increasing significantly, as are disability compensation benefits (PCH) and ASE (child welfare).
It is now urgent to have a deep reflection on the sustainability of new expenses and to stop adding more as the communication needs of the different ministries evolve, warns Mr. Sauvadet.
The departments spend 71.5 billion euros each year on their operations, including 41.1 billion euros for intervention allocations (social aid, subsidies, sport, culture, development).
They invest 12 billion euros each year. But because they have the obligation to vote for a balanced budget, their investment capacities are gradually being reduced, the press release continues.
We must face the facts: the bill is dirty and the state compensation is insufficient, adds the centrist elected official, who regrets the absence of fiscal leverage since the loss of the tax on built land, replaced by a share of VAT.
On the aspect of roads, of which the departments manage 380,000 km which represent nearly 4 billion euros of annual investments, Mr. Sauvadet also wants a part of the numerous resources generated by the road to be allocated to the departments.