The situation of local finances “continues to improve in 2022”, with income extracted from VAT for the departments and regions, but the situation continues to be contrasted from one community to another, the Court of Auditors pointed out this Tuesday in its annual report. “Local authorities once again experienced a very favorable financial situation in 2022, as evidenced by the evolution of their savings, their investment expenses and their debt,” the authors indicate, citing a “high” cash position of 60 billion euro.
Record gross savings for local authorities
Except for the municipalities and inter-municipalities, the operating income of the communities increased at a “level identical to that of inflation (+5.2%) and somewhat higher than their operating expenses (+5%).” This increase is driven by VAT collection (+9.2%) “amplified by inflation and increased consumption”. The State also allocates an increasing part of this national tax to local authorities to compensate for the abolition of local taxes.
In 2022, the gross savings of the communities, which corresponds to the balance of income and operating expenses, reached 44,000 million euros. “It has never been so high,” comments the institution on rue de Cambon. In addition, investment spending (68,000 million euros) grew by 6.8%, although inflation “reduces its increase in volume.” For its part, municipal spending, weighed down by inflation and the rise in the index point for civil servants, increased more than revenue. “This did not stop gross savings and investment amounts from continuing to rise,” the report says.
Restitution to the State of part of the additional income linked to VAT?
The magistrates, however, recognize “significant disparities in the situations” within each category of communities, and point to “an increase in operating costs that is all the greater (…) as the municipalities are small.” In addition, 14% of the municipalities, particularly those with more than 50,000 inhabitants, and 8% of the inter-municipal ones have negative net savings and, therefore, do not generate enough income to repay their loan.
Elaborating on the observation of a “VAT dynamic that has contributed 5,600 million euros of additional income to the communities”, the Court wonders about the restitution of part of this amount to the State. “The modalities for community participation in the overall recovery of public finances have not been decided,” they recall, however. “Our analysis is not at all that of the Court of Auditors,” reacted André Laignel, president of the local finance committee, which defends the interests of the communities.
Source: BFM TV
