NewsFedea Accuses The Government Of Creating Tailored Suits To Benefit Certain Regions

Fedea Accuses The Government Of Creating Tailored Suits To Benefit Certain Regions

The Foundation for Applied Economics Studies (Fedea) believes that the initial proposal for the reform of the autonomous financing model , sent by the Ministry of Finance to the communities, generates ” ad hoc adjustments ” or “tailored suits”, which his judgment, “they open the door to a certain arbitrariness”.

In a report written by the director of the Foundation , Ángel de la Fuente, the proposal for the revision of the calculation of the so-called ‘adjusted population’ is analyzed, which will determine the distribution of resources based on demographic, social or territorial circumstances, and a “tentative quantification” of the “financing needs” that the application of this formula would yield for each community is addressed.

The tax revenues of the autonomous communities are accounted for in a way that tries to approximate the collection that would have been obtained if a common regulation had been applied in all of them. In addition, the calculation is made with the ‘adjusted population’ that takes into account factors such as insularity, the area of ​​the territory, the dispersion of the population or the dependency ratio (of both adults and minors). With all this, what is known as effective financing per adjusted inhabitant is built.

The final distribution generated by this system has been frequently criticized, which ultimately overfinances some regions while underfinances others. The Government seeks to reformulate regional financing in an attempt to correct these imbalances. However, the new formula does not convince Fedea, since it leaves the door open for certain arbitrary parameters to return to generate the same grievances that occur today.

Regarding the analysis, and after specifying that “it is not yet talking about the effective distribution of resources”, but about “an ideal distribution formula based on the estimated costs of providing a homogeneous basket of services and benefits throughout the country” , Fedea concludes that the Treasury has assumed “the bulk” of the proposals of the commission of experts for the reform of the system, although it has also included a “more debatable” part.

Same vices
This has to do, he points out, “with the introduction of two ad hoc adjustments that involve falling back into one of the most persistent vices of our financing system: the tendency to try to make ‘tailored suits’ instead of looking for general rules sensible casts. “

It is, he indicates, “the peculiar distribution ‘by blocks’ of the fixed costs item that is proposed based on a confusing and unnecessary analysis exercise” and “the introduction with a shoehorn of a new indicator of selective depopulation designed expressly for give priority to certain regions “.

“These adjustments generate significant changes in the spending needs of some regions that are difficult to justify based on the (scant) existing evidence on the impact of geographical factors on the cost of regional services, which rather points to such factors are already collected in a more than sufficient way in the current model, “says the foundation.

The big winners of the new pay-as-you-go system
Regarding the “tentative quantification” of the “financing needs”, he assures that the proposal sent last Friday to the communities by the Ministry of Finance “would entail significant changes in relation to the model still in force in terms of spending needs recognized to some communities “, increasing them by more than 7 percentage points for Aragón and Extremadura and reducing them by almost 3 points for the Canary Islands and Galicia.

It so happens that the communities that would gain the most from the proposal, according to Fedea’s calculation, are all those that met in Santiago de Compostela on November 23 except the host, Galicia: Aragón, Asturias, Cantabria (which already it is one of the great beneficiaries) , Castilla y León, Castilla-La Mancha, Extremadura and La Rioja; in addition to Murcia and the Balearic Islands.

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