Tax cuts are one of the main pillars on which the action of the new autonomous PP and Vox government, which soon became head of the Generalitat, is based. It has already taken various initiatives in this regard. However, as the municipalities themselves admit, as can be seen from the draft budgets, this path is not the path followed by large municipalities, or even right-wing governments. In fact, Elche is the only exception in the province, in a context where Orihuela, Benidorm, Alcoy, Dénia and Santa Pola plan to increase rates or taxes, while Alicante, Torrevieja, San Vicente del Raspeig and Elda advocate freezing them.. They argue that the need to cover the increasing cost of services provided to citizens lies behind the financial policies of these councils.
The tax cut plan promoted by Consell is not making a fortune among city councils. There is no such thing among those with similar ideologies. Seven out of ten municipalities analyzed in the province of Alicante have right-wing rulers.
The exception that confirms this rule is Elche, a municipality where the electoral reversal occurred in the last elections thanks to an agreement between the People’s Party and Vox that left PSPV and Compromís without a government. Maybe that’s why The new Administration, led by Pablo Ruz, wanted to make its mark and live up to what it preached with a gradual reduction in taxes, which will take its first step next year. Specifically, and with the approval of all tax regulations, 1% in the Property Tax (IBI), the Mechanically Traction Vehicle Tax (IVTM), the Economic Activities Tax (IAE) and the Construction, Installations and Construction Tax (ICIO). Yes, while there is an increase in tow truck fees, the occupation of public roads, which was suspended due to the Covid epidemic, as in most municipalities, will also recover. Treasury Undersecretary Francisco Soler claims that the aim of the reductions is to stimulate economic activity and guarantee that there will be no interruptions in social issues. “This section will be fully protected,” he claims.
On the other hand, In Alicante, where the popular Luis Barcala remains mayor with a simple majority, budgets are aimed to be approved on time for the first time since 2015.It also takes into account that the current draft has been extended from 2022. Treasury undersecretary Antonio Gallego explains: “The aim is to present the draft to different groups in the same month of October, so that approval can come in November.” To start with, on financial matters, there will be a 3.25% cut on the ICIO to encourage construction, while on rates they are working on various legislative adjustments and some price updates. Regarding the remaining taxes, the aim is to freeze them, beyond making adjustments to the articles. Gallego emphasizes that this will not harm the provision of services; because, as Gallego points out, they hope to compensate for this with population growth and its consequences on the level of tax collection.
In the municipality of Torrevieja, where the popular Eduardo Dolón renewed his mayoralty, efforts are also being made to ensure that the budgets come into force on January 1. Treasury Undersecretary Domingo Paredes states: City Council’s intention is to freeze rates and taxes after last year’s cutHe also emphasizes that the IBI valid in the municipality is the established legal minimum value. After a four-year break due to the coronavirus, the occupancy rate of public roads, which report an annual income of nearly two million euros to the municipal coffers, will recover.
San Vicente del Raspei also chooses to maintain fees and taxesThe municipality is run by the popular Pachi Pascual, thanks to a deal with Vox that removed socialists from the Mayor’s Office. As the current mayor explained, the criterion that must be followed in tax matters is the freezing policy. “This is a realistic benchmark,” he explains, “because these resources are needed to launch new projects and services and face the predictable increase in costs for those requiring improvements such as cleaning and waste collection.”
new contracts
In Benidorm, there will be an increase in taxes and fees. The City Council, led by the popular Toni Pérez, who renewed his post as Mayor while assuming the presidency of the Provincial Council, has an accounting deficit of 27.5 million euros, such as garbage from the cost increases of new contracts planned for 2024. The increase in the salaries of municipal staff was also added to collection, lighting and park maintenance. As municipal sources recently explained, With this panorama, an increase in IBI is planned, the amount of which is not yet known.. In any case, the local government rules out that this rate is 73%, as suggested in a technical report in the economic field. In addition, an increase in the garbage rate is expected to range between 30 percent and 40 percent. To all this we must add the improvement in the occupancy of tables and chairs on public roads, as in most municipalities.
In Orihuela, where the PP and Vox govern in coalition and the popular Pepe Vegara holds the command rod, Given that existing budgets have been extended since 2018, the main goal is to have budgets again. Due to differences of opinion, first between the old administration formed by PP and Cs, and then between this party and the oranges, after the motion of no confidence that elevated PSPV to the Mayor’s Office. In any case, it looks like this time will be the charm and the City Council will be able to start the year with new accounts. According to information provided by the municipal economic department, the fiscal agenda has not yet been fully finalized, but the garbage rate will initially register an increase due to the new national tax on the disposal of waste to landfills. It also examines the increase in IBI. They point out that the four years without updates due to lack of budget dominate here.
The Santa Pola City Council, where the popular Loreto Serrano remains Mayor, will also have to review its garbage rateIn order to bring the collection closer to the service cost. This was stated by Treasury undersecretary José Pedro Martínez, who underlined that other rates will also be adapted to avoid deficits. Of course, he emphasizes that circulation tax and IBI will not change, underlining that in the case of the latter, it is at a low level.
left governments
So what do left-run councils plan to do? In principle, they adhere to their ideological model in the sense that taxes are necessary to have quality public services. For this reason, Alcoy Municipal Council, led by socialist Toni Francés, will impose increases in public rates and prices, this time in coalition with Compromís. As Undersecretary of the Treasury Vanessa Moltó explained, “we had froze them in recent years, coinciding with the pandemic, but we have already accumulated a deficit of 15% and the idea is to review this because taxes keep the services going.” Taxes will continue to remain the same in principle.
In Dénia, socialist Vicent Grimalt also continues to lead the City Council and, as in Alcoy, shares the government with Compromís. And there will be increases here too, not even very small increases. Treasury chief Paco Roselló explains: They will have to increase IBI by 10%with the aim of confronting, although not entirely, the decline in revenue due to the reduction of capital gains and licences, the waste tax and the new city bus service. The rest will remain untouched.
Finally, in Elda, where Rubén Alfaro, also a socialist, continues to serve as Mayor with the support of Elda for All, the fiscal policy that will come into force in next year’s budgets has not yet been evaluated because it has started. process. In any case, according to information provided by Finance Council Member Fernando Gómez, The aim is not to impose more taxes on citizens. In his words, “We are waiting for the technical reports to see what the current status of the City Council is, but we will try to maintain the current base first.”
Uncertainty regarding the spending rule and transfers
If preparing a municipal budget that balances all accounts is difficult from the start, things become even more complicated when revenue information or rules to apply are missing. This is the situation facing city councils as they have not yet received information from the State regarding their corresponding transfers from tax collection at the national level and it has not been explained to them whether there is a spending rule or not. The practice, which was suspended due to the pandemic, will become mandatory again starting next year, as first announced.
Considering that it is normal for tax transfers to increase from year to year, many municipalities prefer to prepare their budgets based on the revenues obtained last year. We are also operating under the general assumption that the spending rule will be reapplied. Similarly, treasure remains are used to overcome possible deviations in initial estimates.