How city councils are financed

In times of economic crisis, the funding sources of the different public institutions are constantly reviewed to try to increase their efficiency and savings. The municipalities, which have certain exclusive powers assigned, receive income through different channels . We will see to what extent they have financial autonomy .

Steps to follow:

one

Municipalities are financed in three possible ways: with municipal taxes, contributions from the State and income from concessions and patrimonial values.

two

Taxes such as the IBI (Real Estate Tax) or the IAE (Tax on Economic Activities) or those that record the possession of vehicles or the capital gains of land, already represent more than 60% of the income.

3

Then there are also capital transfers, derived from the execution of the Local Investment Fund and the current transfers of the general administration of the State, which are mostly made through the Provincial Councils.

4

Thus, the Central and Autonomic Administration pay the other third of the expenses of the city council. But we must bear in mind that what the State contributes to the municipality is part of what you pay in taxes, within the PIE (Participation in State Income).

5

Finally, what is collected through income from assets includes, for example, interest on transactions for transfers, leases or current accounts. This would be the least bulky in the total.

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