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17/11/2008 A municipal problem
We are attending a substantial worsening of the economy that can have very negative effects on the public coffers. Any public being, just as a person, has income and expenses, and based on how evolutions their income and expenses will go to him better or worse the things. If to in a family one of the people it remains in unemployment, their income are reduced and/or reduce the cost or go led the bankruptcy.
Applying to this basic principle on the beings public we were whereupon the economic crisis can affect of very significant form the local beings (city councils) since their income depend more on the construction activity. Concretely, within the income two games exist
corresponding to the Tax on the Increase of the Value of Lands and the Tax on Constructions, Facilities and Works whose weight on the total of income mainly reaches in many cases numbers over 10% where the construction activity has been very significant. It is probable that this route of income is reduced of very significant form since the construction activity has stagnated. If the income in a 50% were reduced, the deficit of these institutions would be of 5% (over 3% fixed at the most to the EU).
This it is not the unique problem since other sources of income also will be affected as the PERSONAL INCOME TAX or the transferred V.A.T. the local beings given to the increase of unemployment in a case and the contraction of the consumption in the other. This could very put the deficit over 5%.
Yes in addition what it is tried it is that the public sector invests to compensate the smaller activity of the private sector would suppose an increase of the cost which also would make worse the deficit.
Analyzing the cost of the city councils, approximately a 65% correspond to current expenses (pays of personnel a 28% and another 37% in current goods). The other 35% are essentially in Investment that we agree in which we cannot reduce it. Thus the route that is left us to be able to compensate the public accounts and/or to increase the investment is to reduce to the current expenses via reduction of the pay of the civil servants or saving in the current expenses of the city council like organization of Christmas celebrations or at another moment, acquisition of official, movable vehicles, driver,…
It is clear that if you enter less and you spend plus the situation will get to be untenable, is responsibility of all, but the public accounts are thing of the politicians and also envelope must be acted they.
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