The financial situation of communities is more than ever suspended this year from the economic situation and will certainly be “no better” than in 2021, warns the Court of Auditors, calling for more solidarity and better predictability.
Faced with a very changing economic climate, the Court of Auditors is showing itself to be very cautious two months from the end of the year as to the forecasts on the finances of the communities in its report published on Wednesday.
On the one hand, the institution is reassuring about revenues, which should rather progress (remain dynamic) thanks to tax reforms. The abolition of housing tax on main residences, offset in the form of fractions of VAT allocated to local authorities, thus allows their revenue to increase automatically when the amount of VAT collected increases.
On the other hand, the Court underlines the difficult to predict increase in direct expenditure (purchase of goods, energy and services) but also indirect (revaluation of the index point which determines the salaries of civil servants).
The Court also underlines that inflation does not weigh in the same way according to the local authorities: their finances are unequally sensitive to inflation according to the share of expenditure devoted to combustibles/fuels, food and non-storable supplies ( water, sanitation, energy, district heating).
These non-storable supplies represented, for example, 4% of the operating expenses of municipalities in 2021 compared to 0.5% for the regions. Similarly, food represents 0.9% of municipal expenditure and only 0.01% for the regions.
The regions should suffer proportionally less than the municipalities from the rise in the prices of energy and food products in 2022. Ditto for the impact of the revaluation of the index point, personnel costs representing 53.8% of expenditure municipalities and 19% for the regions.
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Finally, local investment could suffer from the rise in credit costs, underlines the Court.
The situation at the end of the year will certainly not be better than in 2021, conceded the Court of Auditors during the presentation of its report to the press.
The institution insisted on the great heterogeneity of the situations according to the communities, calling for more solidarity between them, but also for better predictability of their financial resources.