• València has proposed an Economic and Financial Plan that does not require additional measures
- After the Ministry’s change of criteria, the Local Government Board proposes an Economic and Financial Plan that does not require additional measures as the 2025 Budget complies with the spending rule
The Local Government Board has proposed the adoption of an Economic and Financial Plan that, in order to comply with the spending rule in 2025 and 2026 and considering the favorable data of the City Council, will consist solely of monitoring budget modifications that increase spending and tracking execution. According to the plan developed by municipal technicians, it is not considered necessary to include specific corrective measures for spending as it is concluded that monitoring budget execution throughout the 2025 fiscal year can ensure compliance with fiscal rules in its settlement.
As explained by the Councilor for Finance and Budgets, María José Ferrer San Segundo, «the Ministry of Finance published on May 10, 2024, in response to ‘frequently asked questions about the effects of the reactivation of fiscal rules in 2024 regarding local entities,’ that ‘whenever the local entity closes in a position of balance or surplus in terms of national accounting, the approval of an economic-financial plan would not be necessary.'»
In this regard, she continued, «this new government team, in addition to reducing the debt from the inherited 232 million to 142.9 million at the end of 2024, has managed to close the fiscal year with a surplus in terms of national accounting of 102.3 million euros, complying with the principle of budgetary stability.»
Based on these magnitudes, «had the Ministry followed the criteria indicated in March 2024, even though in that fiscal year the computable spending exceeded the established limit by 52.4 million, the approval of an economic-financial plan would not have been necessary,» stated Ferrer San Segundo.
However, after the Ministry backtracked on what it had stated in writing, with the publication in March 2025 of a new, different, and contradictory response, in which it states that «local entities close the 2024 fiscal year with a deficit or fail to comply with the spending rule, they must approve an economic-financial plan in the terms established in article 21 of the LOEPSF,» and following the criteria of the Municipal General Intervention; the Local Government Board has proposed to submit to the Plenary the approval of an Economic-Financial Plan that does not require the adoption of additional measures, beyond monitoring budget modifications that increase spending and tracking execution.
As the First Deputy Mayor also pointed out, «it is, in any case, and as clearly stated by the Municipal General Interventor in his report, a ‘non-structural situation.’ That is, a purely circumstantial issue that does not stem from exceeding the spending limit (the computable spending has increased by 2.599%, below the reference rate set at 2.6%), but from applying the largest tax cut in the history of this City Council, leaving more money in the pockets of Valencia’s residents and traders without implementing cuts.»
In this regard, Ferrer San Segundo recalled that «while the PSOE and Compromís raised municipal taxes on 100% of Valencians, the government team led by Mayor María José Catalá approved in 2023 for the year 2024, in the first electoral year and without the tactics of waiting until the end of the term, the largest tax cut in the history of this City Council; benefiting 99% of residents and traders with a 20% reduction in the Property Tax, the expansion of discounts for large families, the almost disappearance of capital gains tax among direct relatives, and the reduction of vehicle tax and sewerage fee.»
In her opinion, «our policy is diametrically opposed to that of Sánchez, with whom 94 tax and contribution increases have occurred. In just six years, Spain has increased its tax burden by 1.9 points of GDP, while the European Union as a whole has reduced its tax pressure by 0.9 points. And, as a final note, in 2025, the Sánchez government has also imposed on all municipalities in Spain the collection of a garbage fee, obliging taxpayers to cover the cost of the service.»
As the Councilor explained, the lower revenues of 52.44 million euros have already been addressed in the 2025 budget, as both at the time of its approval and in the modifications that have already been approved, the reports from the Interventor expressly indicate compliance with the spending rule.
Furthermore, as she pointed out, «among the expenses of the 2024 fiscal year are, as noted by the Financial Service report, unforeseen outlays as a result of the dana for more than 23 million euros, which this municipal government promptly addressed while awaiting the arrival of funds from the Spanish Government; as well as having to take on the payment of 5.5 million for overdue staff expenses incurred in the 2022 and 2023 fiscal years, which the previous government left unattended.»
The municipal Head of Finance and Budgets concluded by stating that «the Spanish Government is very demanding with municipalities whose funding does not improve, but systematically fails in very serious obligations such as that of Article 134 of the Constitution to present budgets. However, the municipal government led by Mayor María José Catalá has presented and approved the budget in each of the years that it has governed this city, thereby allowing for the improvement of the city.»