The ceiling for non-financial expenses, called spending ceiling, was approved this Thursday in plenary session of the Cortes regional with the votes of the socialist majority and is estimated at 8.315 million euros by 2025with a variation of 4.5% compared to the previous year, an increase which, according to the Minister of the Treasury, Juan Alfonso Ruiz Molina, will not affect taxes (increase in tax pressure) “in no case”. The spending ceiling was agreed in the Government Council on August 27 and “will consolidate progress and economic growth,” the councilor added. “This responds to the commitment made in 2015 to social agents, businessmen and workers to maintain the tax freeze in our Autonomous Community and even reduce it, as has already been done in 2022 and 2023,” the councilor said.
In his speech, Ruiz Molina explained that the spending ceiling This is the maximum that the regional administration will be able to spend over the next year. and its preparation was made “with the utmost caution” and taking into account the resources coming from the regional financing system, officially communicated by the Ministry of Finance; the budgetary stability objectives, based on those approved at the last Fiscal and Financial Policy Council, held on July 15; the estimates of what should be collected under the taxes managed by the Council and the non-finalist transfers received from the European Union and the State.
Capping spending means having the “necessary wickers” so that a budget can be prepared aiming, once again, “to improve the quality of life of all citizens”, as well as to “promote the economic development of the region”; in short, to continue “to consolidate the progress and well-being of Castilla-La Mancha, as we have been doing since 2015”.
The head of the Treasury stressed that, from an economic point of view, Castilla-La Mancha is in an environment of sustained growth that has allowed his ministry to draw up “prudent” forecasts for growth of 2.3% by the end of 2024 and 2% of GDP in real terms by 2025.
A scenario endorsed by entities such as AIReF and renowned research services, such as those of BBVA and CEPREDES, and which is added to the “inflation control“, which according to the latest data published by the Bank of Spain stands at 2.6 percent, and which is expected to fall in August, after the publication last week of advanced data for Spain, which were reduced to 2.2%.
Ruiz Molina also highlighted the political stability that the Autonomous Community is experiencing, and which contrasts – he said – with the situation at the national level, in which the spending ceilings and budgetary stability objectives presented by the Spanish government were rejected in the Congress of Deputies, with votes against the PP, VOX and Junts, to whom Ruiz Molina asked that, in the event of representation, “defend the interests of the region and vote for it.”
The first element of the expenditure ceiling is the own non-financial income, which amounts to 8.247 million, varying by 4.6 percent compared to the previous year. Of this figure, the councilor stressed that 88%, or 7.257 million, are the income that corresponds to Castilla-La Mancha of the current financing system.
A high percentage that “reveals the importance for the region to urgently address a modification of the regional financing system, which corrects the defects of the current one, and of course that this new financing model is addressed in a multilateral manner.” The remaining 12%, or 990 million, “corresponds to the tax revenues that we manage from the Regional Administration and those coming from other administrations, such as the State or the European Union.”
The second component is the deficit for next year, as agreed at the Fiscal and Financial Policy Council in July, “it is 0.1% of regional GDP, which represents approximately 55 million euros”. A third dimension concerns the adjustments to national accounting, those that must be made so that the expenditure ceiling is set in terms of national accounting and which, by 2025, should total 12.3 million euros. The councillor recalled that the income of the REACT EU fund, on this occasion, has not been estimated since “Castile-La Mancha is one of the three communities that have carried them out”.
Opposition responds with ‘Catalan quota’
The PP’s deputy spokesman in the Chamber, Santiago Serrano, took advantage of his intervention in the plenary session to denounce the “unconstitutionality” of the Catalan quota, a financing system that “will harm the community” with a 14% reduction in the funds it receives, and predicted that the “Catalan party” could only be financed with “an adjustment of expenses or with more taxes, something that the PSOE knows how to do, as it has already demonstrated in Castilla-La Mancha and in Spain”, he said to justify his “no” to the spending ceiling.
For his part, Vox MP Francisco José Cobo criticised the region’s debt and criticised the reform of the state’s financing system. “We are sinking headlong into debt,” and he said that the councillor was going to have a bad time with the “economic agreement” between the state and Catalonia.
