The drought and the rise in interest costs reduce the social weight in the Catalan Budgets

Pere Aragonès already has in Parliament what will likely be his last budgets before the elections.

They were taken this Wednesday by the Minister of Economy and Finance, Natàlia Mas, with the question still as to whether the common people will give them their support, as the PSC will.

As usual, the new regional accounts will be the most expansive in 2024 (43,673 million, 9.6% more) in the history of the Generalitat, although this year they will break an upward trend in social spending: education, health and other chapters of the Welfare state will represent 72.6% of total spending, six tenths less than a year before, despite the fact that the absolute figure is growing.

This contraction of the peso, the Government assures, is explained by the increase in resources to fight against the drought, for an amount of 1,045 million euros, and it faces a higher interest payment, motivated by the fact that the credit portfolio does not stop growing ( will reach 86,568 million, 400 million more) and interest rates have risen.

Altogether, 1,372 million will be paid in interest, compared to 782 million a year before.

It is the largest amount of the decade.

For the budget project to go ahead, however, the Government will have to convince En Comú Podem, which is completely opposed to giving its endorsement if Aragonès does not guarantee that it will paralyze the Hard Rock gaming macro complex, in Vila-seca and Salou.

This position is totally opposite to that of the socialists, who want to secure the Tarragona macrocasino and who have also reached an agreement with the Government valued, according to the Generalitat, at around 250 million.

Despite their doubts, everything indicates that the Republicans support the project, since they were the ones who validated the license that allows it and are aware that they risk millions in compensation if they complete a project in which Hard Rock intends to invest more than 1,000 million euros.

This project has no items in the 2024 Budget, nor do the agreements that the pro-independence parties have been extracting from the PSOE during the investiture negotiations have any effect: neither forgiveness of part of the debt (15,000 million from the Autonomous Liquidity Fund) nor the analysis of a unique financing for Catalonia.

For now, the bulk of the resources that the Generalitat will have in 2024 will continue to come from the current financing model, 84%, and which offers 17% more resources this year.

14% comes from the Generalitat's own and transferred taxes, which this year will fall by 2.5% due to the decline in the real estate sector and, therefore, from the collection of taxes on property transfers and documented legal acts, which They will be reduced this year by 5.7% and 10.9%, respectively.

They are the main entry of own resources (2,457 million) and this contraction will mean 188 million less in cash this year.

The Generalitat estimates closing the year with a deficit of 0.1%, which represents an additional margin of 293 million, which explains part of the increase in debt.

This year, European funds belonging to the Next Generation mechanism are not counted, as was the case in the last two years, since they are already in the execution phase.

Although social spending loses weight in the Budgets compared to last year, all departments see their planned spending increase, since the pie is getting bigger and bigger.

Health is the highest, with 12,059 million budgeted, 5.6% more than the previous year.

In this department, the Generalitat recognizes that there has always been a mismatch between what is budgeted and what ends up being spent, and that to cover the difference as the year progresses, budgeted items of transversal or contingency funds are usually used, which which is known as displaced spending —for example, in 2023 11,635 million were budgeted for Health, but last November spending had already increased to 14,157 million.

But the Generalitat chooses not to foresee this imbalance from the beginning, although it recognizes that it is systematic.

However, in these 2024 budgets it has included an extraordinary fund of 800 million that is already reserved to cover part of this mismatch between what was budgeted and what was overspent in Health.

Education is the second department with the most budgeted spending, 7,508 million, 10% more than last year.

And in Social Rights the budget is 3,612 million, 8.7% more.

Of the three branches of the Welfare State, the one that has grown the most since 2020 is Social Rights (35%, while Health and Education 32% each).

Outside the social sphere, the Department of Territory is the one with the most spending (2,462 million, 11.5% more), followed by the Interior (1,924 million, 6.1% more), Research and Universities (1,682 million, 6.5% more) and Business and Work (1,472 million, 9.2% more).

The department that sees its budgeted spending increase the most is Culture (which with 566 million grows by 19.5% compared to last year), in line with the objective of increasing the weight of this department with respect to the whole by up to 2%. of the budget (the 2024 accounts still do not reach this goal, since the weight of culture remains at 1.7%).

Unlike last year, when personnel spending grew more than the average increase in spending in the Budgets, this year it grows less.

Chapter 1 of the Generalitat's expenditure, referring to staff remuneration, grows by 7.8% (while the average total expenditure grows by 9.6%).

The number of budgeted staff increases by 2.6%, to 290,196.

That is, for this year it is budgeted to hire 7,309 more full-time people than last year.

Most of them will go to Health and Education.

Public sector investments in this budget reach 3,064 million euros, 9.7% more than last year, and more than double that of 2014, when public investments suffered adjustments derived from the financial crisis.

Where there is the most investment effort this 2024 is in railway infrastructure, in Health and in road infrastructure.

Also noteworthy, due to the context of drought in which Catalonia finds itself, are the investments in the water cycle (228 million), which added to the departmental programs and expenses, add up to a budget allocated to water and drought of 1,045 million euros.

Of these, 327 million will be used to expand and maintain the regeneration and desalination plants, and 86 million will go to improve irrigation to save water, among other items.

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