The state’s substantial funding injections into autonomous communities during the 2020 covid outbreak continued for some regions, but Valencia Community saw a notable reduction in funding compared with others. A recent study by the Foundation for Applied Economics Studies (Fedea) highlights that additional resources were often allocated to the most treated areas, widening disparities with those in the lower tail of the distribution. In this analysis, four regions experienced a further deterioration in resource distribution in this period, with the Valencia community ranking as the second most affected. The region led by Ximo Puig reached an index of 89.5 out of 100, while Murcia stood at 89.4. Andalusia and Castilla-La Mancha posted higher indices of 94.2 and 99.3, respectively, while La Rioja, Cantabria, and Extremadura were the clear beneficiaries with indices of 118.9, 118, and 108.2. [Cited: Fedea study]
The study also indicates that Murcia, the Valencian Community, Andalusia, and Castilla-La Mancha are four partner system communities with a funding index for homogeneous per-capita skills that falls below the national average. When the extraordinary pandemic-related income is excluded, these regions consistently rank at the bottom. The adjusted per-person funding index for homogeneous competencies stood at 92.2 in Murcia, 93 in the Community of Valencia, 94 in Andalusia, and 95.8 in Castilla-La Mancha. In contrast, above-average performers include Cantabria at 116.9, La Rioja at 111.7, and the Canary Islands at 110.3. [Cited: Fedea study]
Financing complaint: from 3,305 euros in Cantabria to 2,582 euros in the Community of Valencia
The four regions most affected by the funding gaps were among those pushing for a compensation fund during reforms of the regional finance system under Pedro Sánchez’s administration. The report confirms that these four autonomous communities faced below-average funding, arguing that the adjusted population should factor into the new regional funding model. [Cited: Fedea study]
Consequences of underfunding
Valencia and Catalonia stood out as the autonomous communities with the highest state debt in 2020, both on a per-capita basis and in total terms. Valencia carried 8,428 euros of debt per person, while Catalonia’s debt per resident reached 8,408 euros. By comparison, Madrid had zero debt outstanding to the General Administration. Fedea notes that fiscal 2020 marked a total autonomous-community debt to the State of 178,865 million euros. [Cited: Fedea study]
In absolute terms, Catalonia emerged as the region with the largest debt, totaling 63,615 million euros in 2020. It was followed by the Valencian Community with 41,931 million euros.
Per capita, Valencia led debt levels at 8,428 euros per person, followed by Catalonia at 8,408 euros and Murcia at 6,015 euros. Funding shortfalls for Valencia help explain its high demand for state support during 2021 and 2020, a period that involved a 62,501 million euro loan from the state and related interest payments of 2,427 million euros. [Cited: Fedea study]