La mejora de la situación de las finanzas públicas de las Corporaciones Locales en la última década
Series: Occasional Papers. 1915.
Author: Mario Alloza and Pablo Burriel.
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Abstract
The Spanish local governments have registered a fiscal surplus since 2012, which contrasts with the deficit registered in other levels of the Public Administration. Despite the heterogeneity in the composition of the sector, this improvement in public finances extends to a large majority of municipalities. Its origin goes back to the reduction and subsequent containment of non-financial expenses that emerged in 2012, especially relevant in the case of spending on public investment. Local governments have used this favorable evolution of their budgets to significantly improve their financial situation. In particular, since 2012, the sector has begun a process of debt reduction, which, while presenting a certain degree of heterogeneity, has led to a notable reduction in its debt stock. This reduction of the liability has been accompanied by a substantial improvement in financial assets, materialized, in particular, in the accumulation of cash and deposits. Although at the aggregate level the sector presents a sound financial situation, comfortably compatible with the debt limits established in the Organic Law on Budgetary Stability and Financial Sustainability, it still has some room for improvement, particularly in the case of medium-sized municipalities.