France's largest local authority, the City of Paris votes an annual XXL budget of ten billion euros each year. Yes, but how did the municipal executive manage his money over the six years of Anne Hidalgo (PS) 's mandate? In an “excellent” manner, the first deputy (PS) in charge of finances, Emmanuel Grégoire, regularly refers his opponents to the two letters “AA”, that is to say the grade given each year to the City Host since 2014 by international rating agencies, "The best possible rating for a French local authority" welcomed the elected official in November.
Debt has increased by 55% since 2014…
On the opposition side, it is rather a dotted zero that is awarded to the outgoing team. "Always more taxes, always more debt and always less services", summarized last month the group Les Républicains et independants (LRI) at the Paris Council estimating the city "badly managed" and demanding a "general and financial audit" of the capital.
The city's debt has indeed swelled throughout the term of office and will exceed 6 billion euros at the end of this year 2020. It is less than the 8 billion agitated for a time by the opposition but that is all similarly an increase of almost 55% compared to the end of 2014, the year of Anne Hidalgo's election. Debt has even multiplied more than five times since 2001 and the arrival of Bertrand Delanoë. "A disturbing and unprecedented trajectory for a large French city", are alarmed by the macronists of the PPCI group referring to "debt dependence".
… But it dropped in 2019
Within the mayor's own office, did the budget adviser not alert as of 2017 about the risks of soaring loan repayments for the 2020-2026 mandate, according to a confidential note revealed by Le Figaro?
Its executive denies any headlong flight but, for the first time in sixteen years, it (slightly) lowered its debt by 40 million euros in 2019. Proof of "serious budget" argued Anne Hidalgo announcing a capacity 9.4-year deleveraging, below the 12-year alert threshold set by the State.
Finance major projects without raising taxes
If the outgoing mayor has decided to resort massively to borrowing (profiting from historically low interest rates), it is, she says, to finance her investment plan of 8.5 billion euros on the mandate (creation of housing or public facilities, urban development) in a context of declining state funding. But also to keep one of its key promises of 2014: not to increase direct local taxes for Parisians in the name of "purchasing power". A tax freeze which she undertakes to renew if she is re-elected in March.
Here again, the opposition shouts a sham, denouncing an explosion in taxes and tariffs for six years: a 15% increase in the prices of nurseries and canteens for the wealthiest families, of terrace or road rights. , parking fines, taxes on second homes, tourist tax. "Parisians have never been so taxed: they pay 1.1 billion euros in taxes more than in 2013, a record increase of 26%," says the LRI group.
"The community remains speculo-dependent and under real estate perfusion"
Without forgetting the windfall of what is commonly called "notary rights", correlated to the explosion in property prices, and whose revenues are evaluated in trifles of 1.65 billion euros for the next year. "The community remains speculo-dependent and under real estate perfusion", tackles the UDI-MoDem group.
Its president Eric Azière explained last month, during the budget vote, that if the City "can maintain in 2020 a stability of local taxes, it is not linked to any good management but to exceptional economic conditions". He added that the capital "is a wealthy city with nearly 850,000 taxable tax households, more than 463,000 businesses, 50 million annual tourists: Paris is full of taxpayers and contributors".
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The wealth of the city of Paris, whose heritage, immense, was evaluated at the end of 2018 at ... 34 billion euros, this is what saves the town hall also estimates the deputy (Act) and municipal candidate Pierre-Yves Bournazel. For whom Anne Hidalgo brandishes the press releases of the rating agencies Standard & Poor's and Fitch and their famous AA as certificates of good management. "What you forget to say," he said in December, "is that their analyzes are based solely on the potential for raising local taxes and selling property to meet your debt. "
"The trajectory is in line with our forecasts," says Emmanuel Grégoire, first deputy
Local finances have been at the heart of violent controversies throughout the mandate. The opponents of Anne Hidalgo (PS) accuse him of having made the debt explode by resorting massively to borrowing to finance his investments and to leave behind a real time bomb with the key to an inevitable rise in local taxes.
A trial that Emmanuel Grégoire, the first deputy in charge of finance, firmly rejects: “The opposition had announced that the debt would reach 8 billion euros. False. It was only € 5.9 billion at the end of 2019 ”. An amount lower than the 6.5 billion euros announced by the executive last November during the debate on budgetary guidelines.
For the right-hand man of the mayor of Paris, "the trajectory of the City is in accordance with the commitments made in 2014, even more favorable". And this, in spite of "the puncture of 4 billion euros in respect of the decrease in endowments and the increase in equalization (Editor's note: redistribution mechanism aimed at reducing inequalities between local authorities) ", recalls the assistant to Anne Hidalgo.
Contrary to the predictions of the municipal opposition, the increase in the debt did not lead to an increase in taxes. Anne Hidalgo has kept her campaign promise and even announced that tax rates would remain stable if she was re-elected in March 2020. But only 8.5 billion euros of investments were financed out of the 10 billion registered in the plan of investment of the mandate (PIM)…
READ ALSO> This billion extra debt forgotten
What the candidates offer
To have a clear view of the city's financial situation, almost all of the candidates (except Danielle Simonnet, LFI) will have an audit carried out by an independent body. The EELV candidate David Belliard speaks of an "ecological audit" intended to verify that each euro invested is for the benefit of ecology and social justice.
Gaspard Gantzer (Parisiennes, Parisiens), Pierre-Yves Bournazel (100% Paris) and Marcel Campion clearly announce that they will not raise taxes. Serge Federbusch (Aimer Paris) even promises to lower "the main tax rates by 10% over 6 years". The environmentalist David Belliard, for his part, talks about a tax system which will "gradually reward virtuous behavior", particularly in terms of waste.
City Hall's “lifestyle” in the crosshairs
If Danielle Simonnet wants to “break with the contractualization imposed by Marcon which imposes to reduce operating expenses and limits the recourse to borrowing”, the other candidates (except David Belliard) speak on the contrary of making savings by reducing in particular the number cabinet members "400 cabinet members in the city is as much as for the whole government", tackle Benjamin Griveaux (LREM).
Gaspard Gantzer also promises to divide by three the number of deputies. The replacement of all retirements will not be systematic for these candidates and the application of working time regulations could - recalls Cédric Villani (dissident LREM) - save 74 million euros each year.
The “train de vie” of the Hôtel de Ville is also in the crosshairs of Pierre-Yves Bournazel, Benjamin Griveaux, Gaspard Gantzer or Serge Federbusch. Many of them cite in particular the driver service of the Town Hall. To increase the resources of the city David Belliard (EELV), wants to make more pay the private companies which occupy the public space while Danielle Simonnet (Décidons Paris) wants to remunicipalize certain services like the underground car parks "which bring in 30 million per year to profit of private companies ”.
Rachida Dati's campaign manager did not answer our questions.
Our file on municipal in Paris:
> Have Anne Hidalgo's promises in 2014 been kept?
> Cleanliness, a major issue for municipalities
> All the candidates (or almost) advocate alternatives to the car
> Housing: how to return the city to the middle classes?
> From Barbès to “Stalincrack”, safety at the heart of concerns
> Pedestrianization of tracks on the bank, from controversy to consensus
> These unforeseen events that marked Anne Hidalgo's mandate