The island's town councils will face an additional problem when trying to work out their budgets next year: the obligation to return to the State Government part of the revenue they received in 2008, the accounts for which have recently been published and show the Balearic Islands as a whole to be in debt to the state to the tune of over 16 million euros.
The sum owing from local councils in Menorca totals 2,059,624 euros, almost half of which, 955,225 euros, is owed by Ciutadella Council alone. Maó Council will have to find 527,274 euros to settle its account, Es Castell 178,698, Alaior 168,882, Sant Lluís 121,782, Ferreries 77,927, Es Migjorn Gran 21,308 and Es Mercadal 8,525 euros.
The Menorcan Councils' contribution to state funds is calculated on an estimated revenue, through rates and taxes, which has not been achieved due to the economic crisis. Although the error in calculation has not come as a surprise to the majority of the island's Mayors, it will still be a blow for the municipal coffers which are feeling the effect of lower revenue from rates and taxes and the government's ban on Councils increasing their indebtedness.
The Spanish Federation for Municipalities and Provinces, FEMP, is negotiating for the payment to be made over a period of five years, starting in 2011.
The money owing will be returned to the government via a proportional reduction in the amounts periodically paid by the state government to the Town Councils.
Island Council's debt
The amount to be returned to the State Government by the Island Council in respect of the 2008 accounts amounts to 1,670,657 euros, a sum based on revenue that has also been overcalculated in view of the crisis.
According to the Councillor for Finance, Gabriel Subirats, the "significant sum" will be an added difficulty when it comes to working out next year's budget. As in the case of the Town Councils, Subirats hopes that negotiations with the central government will extend the payment period to the maximum and that the money can be repaid by reducing the sums transferred from the State to the Island Council to cover the areas for which the latter is responsible.
FEMP is also asking the Ministry of Finance to drop the ban on Town Councils and local entities getting into debt in 2011, a restriction that could be lifted by introducing amendments to the national budget.