An “overall deterioration in the financial situation” of local authorities in 2023. This is the assessment of the Court of Auditors in a report published on Monday, July 22, which indicates that local authorities lost 3.9 billion euros last year, with the departments being by far the worst off.
Thus, the latter, whose expenses are mainly allocated to medical-social action with for example the payment of the Active Solidarity Income (RSA), have seen their savings melt by 4.7 billion euros. They have suffered greatly from the slowdown in the real estate market, a large part of their income coming from transfer taxes for consideration (DMTO) levied on real estate transactions, included in the so-called “notary fees”.
In 2023, DMTO revenues, all communities combined, fell by 4.5 billion euros, the Court points out, which once again recommends reforming the departmental financing system, which is too exposed to economic cycles, while many of their expenses are incompressible. “Around twenty departments” risk being weakened next year by the continued fall in DMTOs, it warns. And to assure that “the departments will experience a more difficult financial situation in 2024 than in 2023”.
The well-off municipalities
The regions saw their gross savings – not taking into account the repayment of their debts – reduced by 0.4 billion euros, their operating expenses having increased under the effect of inflation.
This phenomenon affected all local authorities, with operating expenses increasing by 6.1% overall, due to the increase in their bills, salary increases granted and higher interest on their debt. But their debt increased only slightly, from 186 billion to 188 billion euros.
The municipalities and inter-municipalities are the only ones to see their savings increase, by 1 and 0.2 billion euros respectively, thanks to the increase in their revenue from property taxes.
Local authorities are supposed to contribute to the cleaning up of public finances, but “the programming law in force does not include a mechanism capable of enabling the achievement of objectives relating to local public finances”, the Court criticises.