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The FEMP proposes a package of amendments to the GEA to local governments may face 2011 with guarantees
The FEMP has passed with the support of all political groups represented on its Executive Committee, a package of proposals for incorporation in the Draft Law on State Budget 2011. The objective is that local governments can address the current financial crisis and address have secured their economic and social obligations in 2011.
The President of the FEMP, Pedro Castro, explained that these measures are presented in the framework of the objectives of reducing public deficits and fiscal consolidation path, and the commitments made by the Government of Spain to the sustainability of public finances, embodied in the Stability and Growth Plan 2010 - 2013, so in any case involve increasing the government deficit of local entities.
The FEMP has referred the proposed amendments to the Government and the parliamentary groups and has requested urgent meetings with all political spokesmen of the Congress of Deputies.
FEMP proposals have to do with the refinancing of debt and credit operations in the long term, the rise in payments on account of the participation of local entities in state revenues (PIE), the subsidy to ensure basic social services provided by councils and the Special Fund for municipalities with fewer than 20,000 inhabitants.
In addition, the FEMP considers necessary to enable measures to enable funding councils meet current expenditure over the coming months and thus provide a solution to the situation of lack of liquidity that difficult to meet their commitments payment to suppliers.
On the one hand, insists that the Government enable the ICO credit line referred to in the recent Law on Measures against late payment in commercial transactions, and secondly, to be delayed until January 1, 2013 entry into force of the fourth and fifth articles of the said Act, that have to do reporting on the timeliness of payment and the registry of the Local Government Bill, respectively.
Payments on account of the PIE
One of the amendments to the Draft Budget Law drafted by the FEMP intends to rise from 95 to 98% of payments on account of participation in government revenue each year for municipalities, provincial councils and island councils.
In any case, the FEMP requests the Government to at least exceptionally, in the third quarter of 2011 will make a cash advance on account of the final settlement of 2010.
This bill would allow local entities to have in 2011 a deposit of 3%-about 372 million euros, and absorb, so the balance they have to return to the state about 302 million, by the negative assessment of 2008. In other words, would provide liquidity to local farms to meet the repayment of debit balances in 2011 and 2012 and, in turn, dampen its delicate financial situation.
The FEMP has taken into account in formulating this proposal, the expected growth of government revenues in 2010 and therefore the expectation that the liquidation of PIE this year will be favorable to Local Authorities. He also argues that, unlike in the case of the Autonomous Communities, this measure does not require an amendment to the Text of the Law on Local Finance.
Debt refinancing
With regard to the refinancing of debt, FEMP proposes a legal regime that facilitates the formalization of operations long-term credit for an amount equivalent to depreciation for the year. Although the condition to enter into new credit operations is that the total outstanding principal amount does not exceed 75% of current revenue, the amendment adds the following exception: "except in the case of replace operations within a limit of 80% of capital to recover during the year 2011. "
As for short-term operations, agreed to meet transitional financial situations, FEMP requests can be canceled due to expire after December 31 of each year, not exceeding a period of one year.
Concerted Plan
The FEMP calls for Budget 2011 will not cut the amount allocated to the City Council within the Concerted Plan funded by the municipal social services and guarantees basic benefits received by citizens in a worse economic situation. In the 2010 budget the money devoted to this end was 97.2 million euros. In 2011, PGE has been reduced up to 85.8 million.
This amount the Ministry of Health and Social Policy detracts from the Concerted Plan is a final part that should go to local corporations and state born of the pact signed between the Ministry and the Autonomous Communities, with 22 years of experience. The FEMP argues that the municipalities are the ones who have to endure the pressure of its citizens in situations of special need and, therefore, have to bear the cost of services, at a time when those who already have to suffer the consequences of their limited funding.
The reduction of the Concerted Plan will involve, according to the FEMP, injury to the most vulnerable and job losses. In particular, the loss of nearly a thousand places of accommodation for homeless people and about 500 jobs in social service professionals, and other thousand jobs domestic helpers in the home help services.
Fund for small municipalities
The FEMP requests the Special Fund for municipalities with fewer than 20,000 inhabitants to ensure the same funding than anticipated in the budget this year, ie at a rate of 165 euros per capita in these municipalities. This means that the fund should amount to 50 million euros. The bill now before Congress is set at 45 million.
Investment and Local Cooperation works
The Budget Bill includes a round of 83.6 million euros, from the State Economic Cooperation Program of the Ministry of Planning Policy, for the Provincial Councils, Town Councils and Island Councils for the funding of works in the municipalities. The FEMP wants this state contribution remains in the same terms as in 2010, with an amount of 94.6 million
Replacement rate
Finally, the demand FEMP not apply restrictions on the rate of replacement of staff to the municipalities of fewer than 50,000 inhabitants and, in the case of coverage of places in local government for services and fire prevention , enforcement of local police unit and the ceiling is 100% of the replacement rate.
Behind this demand lies the concern about the serious damage that can lead to local government's application of that rate of replacement, especially in the maintenance of essential services such as social services or emergency personnel. In particular, the level of deterioration of public services is higher the smaller the municipality, have few templates on which it is almost impossible to replace additional staff to cover the losses that may occur.
