Professor Francisco Velasco Caballero, IP of the Local Government and the Changing Urban-Rural Interplay European project at the Autonoma University of Madrid (UAM), recently had an interview with the Spanish newspaper El Periódico de España regarding the depopulated rural areas in Spain or the emptied Spain as they refer to it.
Professor Velasco and the members of his investigation team at the Autonoma University, through the LoGov project, have put a magnifying glass on the financing channels of urban and rural municipalities. They not only analyze the routes of money and financing of Spanish municipal and local entities but also compare it with those made by states such as Canada or Argentina.
Spain has a local financing model dating from 2004, from the Local Finance Law. Like all developed countries in the world, it has created three sources to nourish municipalities with liquidity: the transfers they receive from higher state levels, in this case, the general administration of the State and the autonomous communities; income from own taxes, among which the IBI is the most powerful (the Real Estate Tax); and fees for services (garbage and water are the most common).
Broadly speaking, 52-53 percent of municipal income comes from taxes, of which the IBI represents around 27. Transfers represent between 35 and 40%, which is not a small piece of the pie, far from it.
At this point, Velasco recalls that the criterion that guides the direction of money from the State to the municipalities is the population, although with a nuance that was very present in the enforcement of the local property law: setting a starting point from the beginning. that nobody lost. Another thing is the speed of what each one earns, and how much more or less they earn.
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