Mallorca: Balearics reject €412m yearly funding boost
The Balearic Government has rejected a new funding system that could bring the islands €412 million more each year. It voted against the plan on Friday 4 September at a meeting of Spain’s Fiscal and Financial Policy Council in Madrid. The proposal still passed with support from the central government, Catalonia and the Canary Islands.
Antoni Costa, the Balearic Government’s first vice-president and minister for economy, finance and innovation, said none of the islands’ shared demands had made it into the plan.
Island costs and a growing population
Costa said the system gives too little weight to the extra costs of being islands and, in fact, reduces the importance of that factor. He also said it fails to reflect a fluctuating population and population growth.
The Balearic Islands’ population has risen by 50 per cent over the past 20 years, Costa said. He added that millions of tourists and seasonal workers use public services in the archipelago each year.
He also called for what is known as the ordinality principle: a rule intended to keep a region’s place in the funding rankings closer to its contribution. Costa said the Balearics are the second-largest contributor to the system but rank tenth for the money they receive.
Costa also warned that the scheme could eventually force regions to raise some taxes. He said the Balearic Government would not accept a reduction in its tax autonomy.
More money if Congress approves
Spain’s Government Delegation said the proposed system would give the Balearic Islands €412 million more a year than the current model. It said the islands would move above average for funding per adjusted resident, having been below it under the existing arrangement.
The changes still need approval from the Spanish Congress. If they pass, the adjusted-population calculation would include island status and a new fixed-cost factor, designed to recognise the higher cost of public services in areas with smaller populations or particular territorial conditions.
Source: Europa Press / Mallorca.com