With the political cycle starting after summer, local governments begin drafting budgets for the coming fiscal year. The 2023 budgets remain the last before the next election wave scheduled for May. The current economic mix features runaway inflation and an energy crisis that force contingency planning and press local economies and social life. Mayors must balance cutting spending with keeping taxes steady. EU funds from the Next Generation program and the fact that municipalities have healthier accounts than in the last decade give projects a faster entry into execution. Surveys are underway to gauge public sentiment. Still, not all teams are ready to face updated accounts with the mandate extending into 2023, especially where council support depends on coalition pacts. Avoiding confrontations and preventing a sense of weakness among councillors by missing the budget path is a decisive factor.
Provincial municipalities reduced their debts by 30% during the epidemic: 216 million debtors
The provincial capital, led by Luis Barcala, faces a particularly tight path for greenlighting 2023 budgets. City sources declined to confirm whether the council can keep large accounts in place. The current level of spending is about 313 million euros, with plans to raise investment by 112 percent and add 58 million euros of credit changes. The option to suspend fiscal rules makes this increase feasible. Although recent years show cautious progress, officials stress that all possible scenarios have been considered. In practice, account confirmation is unlikely before the eve of the election campaign, a factor that could push the PP and Cs coalition to reshape alliances in 2022 and implement cuts in social areas. Nonetheless, most planned investments for this year are projected to reach elections fully in place, strengthening neighborhoods, the seafront, and the traditional center.
In Elche, Mayor Carlos González of the socialist group reviewed the main challenges while planning next year’s accounts. Inflation is a key condition and its ripple effects will touch multiple chapters. The city must await central government decisions on municipal staff wages and how CPI increases will be addressed. That adjustment carries extraordinary costs, according to González. Inflation also affects service contracts indexed to the CPI, requiring review and renegotiation of such contracts. Inflation pressures could also impact jobs tied to commitments that may need price revisions. The local government, managed by PSPV and Compromís, does not rule out new strategies to aid families, small businesses, and self-employed individuals facing higher energy costs. Yet González notes the municipal treasury is in solid shape, with six million euros in outstanding debts repaid this year, ensuring investment capacity without resorting to new loans. Taxes will stay frozen; fiscal moderation will guide the plan, especially in the current context.
Benidorm’s city council member Tony Pérez highlights that low taxes are essential, though some accounts will still require robust funding to sustain productive sectors. EU funds back several priorities, including the Sustainable Urban Development Strategy and a Sustainable Tourism Plan for Benidorm, while European money supports more than fifty initiatives in the province. Pérez also points out that national and regional support during an energy crisis falls short of expectations, though Benidorm’s government is confident in overcoming challenges and maintaining energy efficiency through careful spending.
Alcoy’s Finance Councilor Vanessa Moltó explains that the city benefits from substantial EU funding only when solid projects exist. Social programs to assist families and productive sectors will be kept active, and there is openness to revisiting some taxes if needed. Moltó emphasizes that tax pressure has historically been below average and will stay that way as the city plans its budget.
In Elda, the Presidency Council Member José Antonio Amat notes no tax increases are planned, given economic uncertainty. Investments will proceed, supported by healthy municipal accounts, zero debt, and favorable terms with suppliers, avoiding loans while keeping services steady.
In Villena, Treasury Mayor John Joseph Olivares stresses that budgets will reflect EU funds available, with 12 million euros reserved for priority actions. The aim is to adjust current expenditures without sacrificing service quality while keeping tax increases off the table.
In Dénia, the treasurer mayor Francesc Rosello confirms no revenue rises will be sought through tax hikes. Subsidies, especially from Europe, will fund new projects aimed at energy efficiency and progress toward a sustainable tourism destination. These priorities shape the local government agenda.
Orihuela and Torrevieja rush for 2022 municipal projects
Torrevieja and Orihuela moved decisively to approve the 2022 budgets, though for different reasons. In Torrevieja, led by Eduardo Dolon, accounts were delayed amid changes in capital gains rules following a constitutional decision. Treasury Mayor Domingo Paredes explains that capital gains revenue is expected to fall by up to 8 million as the applicable groups change. The plan remains to confirm 2022 accounts and prepare 2023 budgets when the moment allows. The budget line remains broad, emphasizing spending on citizens and services while ensuring warranties, generic services, and maintenance. Tax increases are not planned. In Orihuela, ongoing accounts have been extended since 2018, and current partners PSOE and Cs work to finalize this year’s accounts under a tight timetable. Mayor Carolina Grace emphasizes prudent spending and warns that fiscal rule exemptions will not be prolonged indefinitely. If spending grows too fast now, later adjustments will be necessary. Still, the accounts are healthy, enabling investments with own resources or financing and preserving crucial coastal and urban projects.