The Madrid City Council closed the year 2022 with a deficit of 357 million euros. Although they are still provisional figures, for the first time since 2011 the Madrid City Council presents red numbers.
The fact is especially striking not only because this deficit supposes the first negative impact on the annual accounts of the city of Madrid in 11 yearsbut because this imbalance contrasts with the 4,599 million surplus left by the left between 2015 and 2019, when Manuela Carmena was mayoress of the state capital. In Almeida’s first three and a half years in charge of Madrid, the municipal surplus has been reduced by 89% compared to Carmena’s term.
Furthermore, this 2022 shortfall comes in a legislature without large investments or large projects in the city. In 2011 the deficit was 754 million, but then the cost overruns of the pharaonic project to bury the M-30 and the construction of the new park in Madrid Río weighed down the municipal accounts.
The question everyone is asking is what happened to the money in a legislature that has been quite flat in terms of spending.
Cornered and without many arguments in the face of criticism from the opposition, Jose Luis Martinez-Almeidamayor of Madrid, rushed on Thursday to blame the government of Pedro Sánchez for the hole in public accounts. As explained by the mayor, the central Executive attributed to the city of Madrid in a single year –2022– the deficit of three years after promising the City Council a transfer of 271 million euros between 2022, 2023 and 2024. That money, Almeida complained , finally it will not arrive: “The drop in income of the administrations during the pandemic translated into a lower participation in State income,” explained the mayor.
Almeida also clung to other alibis: he recalled that the Madrid City Council had to pay the people of Madrid 200 million euros as capital gains “only in 2022” after the ruling that declared some provisions of this municipal tax unconstitutional, one of the five that the municipalities have exclusively. Finally, Almeida also used the stormy Filomena as an excuse, whose damages amounted to 60 million euros while complaining that it has only received 1.5 million in aid from the Government chaired by Pedro Sánchez.
The opposition considers that Almeida resorts to excuses of poor payer. “Where is the money?” Was the question they asked. the councilors of Más Madrid Pilar Sánchez and Miguel Montejo on Thursday to denounce “the terrible management” of the mayor of Madrid beyond some excuses that from the outset seem unsustainable. Filomena, for example, happened in 2021 and the surplus value affects all municipalities.
In fact, in Más Madrid they deny the majority and assure that the economic winds have blown in favor of the mayor of Madrid and not the other way around. “Almeida he has had everything going for him, with State transfers and no spending rule. He has squandered the savings of the previous government, the savings of the neighbors because he has been living beyond his means at the expense of everyone’s money,” said Pilar Sánchez.
More Madrid assures that The Tax Agency of the Madrid City Council has stopped collecting hundreds of millions planned in IBI, capital gains or rates, which derives in the red numbers that Almeida presents. What’s more, the representatives of Más Madrid point to the origin of the problem the unbalanced and selective tax cuts that Almeida’s team has practiced. “A municipal government has to collect garbage and collect taxes and they are not capable of doing it,” assured the councilors of Más Madrid. “We leave you as an inheritance a Tuned Stradivarius and he is going to leave a broken tambourine”, recriminated Miguel Montejo by way of conclusion.
This thesis is shared by the PSOE. Emma Lopezsocialist spokesperson for the Treasury in the Madrid City Council, also blamed the municipal deficit of 357 million on “tax chaos” caused by Almeida. “He has spent more than what he has earned and it has not been to finance any major project, because no one remembers a single project that Almeida has done. When you don’t earn money, you don’t have to spend,” López concluded.
Hiring Policies
With the current data, the myth that the right manages public money better falls like a house of cards in Madrid. he says so Carlos Sanchez MatoDelegate Councilor for Economy and Finance of the Madrid City Council between June 2015 and December 2017 and architect of economic policy during the mandate of Manuela Carmena. Now Sánchez Mato throws his hands up looking at the latest economic figures from Almeida, especially in a very favorable context for city councils, including that of Madrid. Something that did not happen four years ago.
“I had to submit to a spending rule that was used as a throwing weapon against the Madrid City Council when Carmena was there. The Rajoy government came to paralyze City Council projects because they implied instability for the kingdom of Spain, they said. But that rule of spending was suspended with the arrival of Sánchez at Moncloa.Almeida has had additional resources that we did not have and has not seen his income affected by the pandemic”, recalls Sánchez Mato, who was dismissed for that budget war between the Government of Rajoy and the Madrid City Council governed by the left.
Sánchez Mato believes that the causes of the economic hole have more to do with the part of the expenses than with a decrease in income, as Almeida maintains. “The municipal taxes have not changed with the pandemic: you pay the same IBI and the circulation tax is the same, for example. In reality, his measures leave Almeida in a bad place. Blaming the coalition government is like saying that the dog has eaten the homework, above all because it has been this coalition government that has increased resources for local corporations like never before,” says Sánchez Mato.
In his analysis, Sánchez Mato detects some ways through which the money has escaped. “The deficit of 357 million euros is justified neither by exceptional investment performance, nor by tax cuts. I suspect that the public procurement policies of the Madrid City Council They have meant a bottomless hole for their accounts, as happened in the past before 2015,” says Sánchez Mato, who gives the case of the masks as an example. “I think that the Madrid City Council has been very kind to companies in contracting processes”, adds the former head of Madrid’s municipal accounts.
Sánchez Mato also dismounts Almeida’s argument that a good part of the money has gone to pay off the huge debt left by the PP before 2015. “You can’t explain the deficit by that either. Almeida has repaid much less debt than us. Until September 30, 2022, he had reduced the debt by 706 million euros. In our case, it was 2,948 million in four years,” says Sánchez Mato emphatically, appealing to the official data provided by the Madrid City Council itself.
What Sánchez Mato has detected is that since 2019, The Madrid City Council has requested 539 million euros in new bank loans to compensate for the decrease in income. “The PP lowers taxes and compensates for the reduction with credits,” denounces Sánchez Mato, who, in contrast, recalls that between 2015 and 2019 the Madrid City Council did not request a single credit. “We finance the policies with taxes, which is what has to be done.”
