Maintaining endowments to municipalities, an indicator "trompe-l'oeil"


On France Inter, Wednesday, the President of the National Assembly said that the state endowments do not decline . Yet this hides growing inequalities between municipalities.
   THE WORLD
 | 11.10.2018 at 16:42
 • Updated
11.10.2018 at 17:31
    |

By decoders

                                                                                                                Guest of the morning of France Inter, Wednesday, October 10, Richard Ferrand, president of the National Assembly, affirmed that the allocations of the State to the local authorities did not lower, in accordance with the promises of Emmanuel Macron.
What he said :
"In truth, endowments are not going down, and even the means to invest are increasing. "
Why it's reducer
Mr. Ferrand is not wrong: after several years of declines, the overall operating grants – the envelope that the state intends to communities to finance (municipalities, intercommunalities, departments, regions) since the government has committed Decentralization, in the 1980s – do not go down. They even increase very slightly in 2018.

But behind this overall amount, there are significant disparities between municipalities. On 16 July, the Association of Mayors of France (AMF) was already alerting to the decline, in 2018, allocations of the State for 47% of municipalities, despite the increase in the total amount. These 16,745 communes, the AMF emphasizes, "are mostly small municipalities with low financial potential", adding that "this situation questions the future of rural communities, in particular".
Same analysis for the President of the Local Finance Committee (CFL), André Laignel. This stable budget is a "trompe-l'oeil" he estimates. The authorities "continue to contribute 10.5 billion euros to the recovery of the accounts of France. (…) Behind the apparent stability of the global operational endowment (DGF), you will again have thousands of municipalities, maybe five thousand or six thousand, which will see their endowments fall ", warned the president of the CFL in April. These allocations, he adds, are not indexed to inflation (1.6% expected in 2018) and, as a result, many municipalities are struggling to maintain their real financial means.
Added to this are several parameters that compensate for this apparent stability, such as the decline in the number of subsidized jobs (35% forecast in 2019 compared to 2018), or the fall in housing subsidies (APL), which has forced the public housing offices to lower the rents so as not to penalize precarious tenants, for a cost of several hundred million euros.

        Read also:
        
    
                Senate report deplores "disastrous effects" of lower aid contracts
    

The 2019 budget worries small municipalities
The decline in endowments for several years is part of the overall decline in public spending, and the significant contribution of communities to them raises for years concerns about lack of funds. And the 2019 budget prepared by the government is not likely to reassure them, since, at the end of September, the Association of Small Towns of France (APVF) noted that it "always imposes on local authorities efforts important, while they contributed the most to the reduction of the public deficit ".
A contribution that is not without consequences, since the capacity of local authorities and especially municipalities to finance the maintenance of the road network has gradually weakened, deteriorating the communal roads, to the point where their viability, as well as that of many bridges, pose question since the disaster of Genoa, in August.
More generally, even if the local authorities emphasize that the public investment leaves (+ 7% compared to 2017), they are worried about the fall of the fixed endowments, which concerns two thirds of the small towns.