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Communities: the Covid crisis will cost 7.3 billion in 2020

2020-07-29T20:22:14.903Z

The finances of local authorities will suffer a negative impact of around 7.3 billion euros in 2020 due to the coronavirus crisis, estimates a report by deputy Jean-René Cazeneuve published on Wednesday and which recommends support measures for 2021. Read also: Coronavirus: local communities in better shape than the state This assessment is in line with that, provisional, of 7.5 billion euros, c...



The finances of local authorities will suffer a negative impact of around 7.3 billion euros in 2020 due to the coronavirus crisis, estimates a report by deputy Jean-René Cazeneuve published on Wednesday and which recommends support measures for 2021.

Read also: Coronavirus: local communities in better shape than the state

This assessment is in line with that, provisional, of 7.5 billion euros, carried out at the end of May by the deputy LREM of the Gers and which had motivated the government to launch an emergency plan for the communities of 4.5 billion of euros. The shock is caused by a drop in tax revenues (5.2 billion) and tariffs (2.3 billion) but also additional costs linked to the crisis (3.6 billion). It is slightly amortized by the growth of some taxes and operating savings. Above all, it is very variable according to the communities. Tourist municipalities have thus suffered particularly from the free fall in tourist taxes. The departments, for their part, saw the collapse of "transfer duties for consideration"(DMTO), that is to say the tax paid for each real estate transaction, and anticipate a strong jaws effect with the upcoming increase in social spending (RSA ...) for which they are responsible.

"The regions will suffer revenue losses which, if they should remain contained in 2020, will be significant in 2021 and will impact their investment capacities", also underlines the report. In this context, the executive had therefore chosen to compensate for certain losses in the form of advances or compensation, up to 2.7 billion for the departments or even 750 million euros for the municipalities and inter-municipal authorities. An investment fund for municipalities had also been endowed with an additional billion euros. According to Jean-René Cazeneuve's report, revenues "will experience a relative rebound in 2021 which will be confirmed in 2022" . But it will not be "general" and "it is therefore necessary to consider new state interventions during the finance bill for 2021" , examined in the fall.

"A local finance programming law"

Among 32 proposals, Jean-René Cazeneuve therefore calls on the executive to maintain guarantees of fiscal resources for the municipal block next year and to continue to provide compensation to the departments, but also to the regions, in order to preserve their capacities for investments. He also mentioned the possibility of providing “additional support” to “mobility organizing authorities” ( AOM), in particular Ile-de-France Mobilités (metro, RER, transilien, etc.), which had been hit hard by the period. The elected representative of the Gers also urges “to learn the lessons of the crisis” by creating “a local finance programming law” , in order to “give visibility to elected officials and reduce their dependence on the State” . It would include, in particular, greater equalization mechanisms between departments, and also between regions.

The president of Regions of France Renaud Muselier is also expected Thursday morning in Matignon to sign a "partnership agreement" with Jean Castex . Three subjects are on the table, while Regions and the executive have nurtured sometimes stormy relations since the start of the five-year term. Taxation, while the State has promised full compensation for the announced reduction in production taxes (less 20 billion euros), collected in the vast majority by the Regions. The State-Regional plan contracts being prepared for the period 2021-2027 and which should allow the implementation of structuring projects (mobility, digital, employment, etc.). And finally, the recovery plan, the broad outlines of which must be unveiled at the end of August and for which the Regions, endowed with economic skills, must be invaluable intermediaries.

Source: lefigaro

All business articles on 2020-07-29

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