CCAA ACCELERATE THE CUTS IN 2013 BY THE FALL OF INCOME

Public services of the regions will be less and lower quality in 2013. Regional governments have less money to lend: Current income-tax those receiving state and transfers will be reduced by 6.1% on average, according to the analysis to Proposed Budget of the Autonomous Communities for 2013 released bythe Ministry of Finance.

The communities also have less fiscal space. They must reduce the deficit by half (from 1.5% of GDP in 2012 approved 0.7% this year). At the time, they need to finance 48.020 million during the year, more than double what the government provided 23 000 million-in Regional Liquidity Fund (FLA) to help territories that can not be financed. Andthat, with parted markets [require tough financial conditions] that do not totally trust the communities.

"The budgets for 2013 will be very restrictive," analysts said Cesar Cantalapiedra AFI and Carmen Lopez in a paper published last Thursday Func (Foundation Savings boxes) on the budget lines of communities. The Ministry of Finance reported earlier this year that communities reduce their spending by 7.1% and announced that all budgets presented [in the absence of accounts of Galicia, Catalonia and the Basque Country by the end of 2012 elections] are set the expected deficit of 0.7% of GDP.The financial constraints, reducing the deficit margin set by the Ministry of Finance and the drop in revenues forced communities to sharpen scissors in 2013. In recent years jibarizaron and investments to a minimum. Just put the knife is left to amputate part of structural spending (the operation): will worsen budget cuts in health (spending falls 6.8%), education (8.6%), social services (-13, 3%) and public sector communities, as evidencedregional accounts compiled by the Treasury. It's already happening in these early weeks of the year. Emergency have been closed in some towns, has risen control pharmaceutical expenditure and limited replacement of teachers in schools.

The cut of the regions affected in recent years, especially, the chapter on investment, have fallen about 50% in the last three years. Gone are the great pharaonic projects and even plans to build new schools and health centers were frozen at best. But after years of barely scraping is scope to lower the investment game without affecting the maintenance of infrastructure already built. And in the sixth year of the crisis are still intact the demands of public reckoning."Once all the cutting path of investment to reduce spending, which after three years of double-digit declines accumulate, 2013 represent only 10.4% of total spending, communities face a process which will be necessary to reduce its functional structure "AFI analysts added.

The Regional executives lay off part of its public employeess-agency staff and temporary-to lower its payroll bill by about 6%, which will save more than 2,200 million, according to data compiled by the Treasury of 13 communities."Budgets have significant cuts in current transfers and personnel costs, primarily based on regional public sector cuts and attrition in the administration itself," say Cantalapiedra and Lopez in the reportof Func. And added: "The financial year 2013 will be very restrictive by way of spending regions with significant public employment destruction and higher than those of 2012."

Many of these workers come from regional public enterprises. One of the great challenges of autonomy for this exercise is the removal of the 477 public entities (companies, foundations and organizations) who are committed to the Treasury to remove.

There will also be reductions in Health, Education and Social Services. Madrid is the community that shrink these items. And that, that the big cut in the occult Health Chapter of capital expenditure (for privatization of management in six hospitals). Murcia (-12.8%), Aragon (-12.9%) and Andalusia (10.8%) are the other territories that more will lower the money for healing. These autonomies with Asturias (-8.7%) are also more teaching resources reduced.

Regarding income, almost all increasesof tax autonomy made in 2013, especially rates rise and the estate and gift tax-will be wiped away by the reduction in the transfer tax and stamp duty (ITPAJD) whose proceeds will decrease this year to 5.088 million ( without Galicia, Basque Country and Catalonia), an average 12.3% less than last year. Regional governments will enter through this tax a third less than at the beginning of the crisis (10,044,000 in 2008). This tribute is the most identifiable with the community activity. Therefore, this decline reflects the image shrink who are suffering the regional structures. To compensate, the autonomous revenue squeeze the inheritance and gift tax. They hope to raise 1.958 billion euros, 23.3% more than in 2012. Regional Executives have also created new fees and uploaded those that already have in place to find resources. Enter 12.9% more for the fees and charges that last year, representing about 400 million more.

"In a scenario marked decrease in revenue, despite efforts to increase revenue and cut the investment pathway critically low, the target demanding compliancedeficit for 2013 will necessarily reduce current spending, "says Func.