The departments are finding it increasingly difficult to cope with the real estate crisis. Less than a week before the arrival of the finance law in the Council of Ministers on September 27, they are launching an appeal for help in the face of an uncontrolled drop in their revenue, which could prevent them from fulfilling their numerous social obligations. .
In the pages from Figaro this Thursday, September 21, the president of the Association of Departments of France (ADF) François Sauvadet calls on the State to take action of “national solidarity” in the face of the “dangerous” financial situation that this real estate crisis is creating for the departments .
At the origin of this financial plunge for the departments, the slowdown in “transfer rights for valuable consideration” (DMTO), these taxes collected by local authorities and the State during each real estate sale. They represent around 15% of the total revenue of a department, according to the National Real Estate Federation (FNAIM). This decline, driven by the fall in the number of real estate transactions, promises to be drastic: according to ADF data it has already reached -18% on average.
A quarter less transfer tax
After an exceptional boom in the real estate sector over the last two years and during the pre-Covid years, the trend has suddenly reversed, depriving the departments of an additional resource. The latter were already experiencing the recent loss of the benefit of the housing tax, which disappeared this year for all taxpayers on main residences.
In Ile-de-France, Essonne, for example, recorded a 25% drop in revenue linked to the DMTO this year, that is to say 80 million euros less, i.e. the construction of two middle schools, according to its President François Durovray. For the city of Paris, around 346 million in notary fees disappear with the real estate crisis. Yvelines, for its part, anticipates a total loss of 125 million euros in 2023. Other, more fragile territories could be even harder hit.
Increasingly important social benefits to assume
Personalized autonomy allowance (APA), disability compensation benefit (PCH), revaluation of the RSA… At the same time, the departments must always ensure the payment of social solidarity benefits, not to mention the numerous efforts to be made on the roads, the retirement homes, disability management, climate change and even the working conditions of nursing staff following the Ségur de la Santé.
Last June, the surprise increase in the civil service index point of 1.5%, which results in additional remuneration for community agents, also increased departmental spending. “All the measures taken by the executive in recent years have led to an increase in departmental operating expenses of 3 billion euros net per year,” recalled in June from Capital the president of the Calvados departmental council.
The ADF is today asking for an increase in the emergency fund intended for the departments most in difficulty, from 60 million to 100 million euros. Another measure, its president calls for recalculating the “overall operating allocation” (Editor’s note: main allocation paid each year by the State to municipalities and departments) taking into account inflation. “A billion is missing,” points out its president François Sauvadet. The expenditure would thus reach 9.133 billion euros for the State, according to its calculations, compared to 8.269 billion today. In the longer term, the departments are now calling for the setting of “funded national cohesion objectives”, as well as a “real reform of local authorities”, to ensure the stability of their revenues.