Madrid, the Balearic Islands and Catalonia were the autonomous communities with the highest fiscal capacity per capita in Spain in 2021. In the ranking of the distribution of tax revenues, they occupied the eighth, ninth and tenth positions. The communities that benefited the most were, in this order, Cantabria, La Rioja, Extremadura, Castilla y León, Asturias, Aragón and Galicia. This trend has been repeated, broadly speaking, since the current model began to be applied in 2009.
These figures are reflected in the seventh update of the Regional Financing Map, which has just been published by the Barcelona Institute of Economics (IEB). This map shows the evolution of the resources available in each territory per capita after the application of the levelling mechanism (the Fundamental Public Services Guarantee Fund, or FGSPF) and the model adjustment funds.
The IEB’s Regional Financing Map shows that some of the communities with the greatest fiscal capacity per inhabitant finally receive a volume of resources that is below the average. Likewise, it is clear that the FGSPF fulfils its objective of reducing the distance between the communities with greater and lesser fiscal capacity without altering the initial order. However, the application of the adjustment funds for sufficiency, competitiveness and cooperation generates distortions in distribution. As a result, the IEB researchers argue in favour of a revision of the model.
The IEB Autonomous Financing Map offers an updated evaluation and analysis of the current regional financing model, in operation since 2009. The various sections of the website present information on the total sum of taxes transferred by the central government to each autonomous community, and the resources that result from the community’s participation in the FGSPF and in the model adjustment funds (the sufficiency, competitiveness and cooperation funds).
The map depicts the four situations that may occur after the distribution of the funds in the current model. Some communities with below average per capita tax revenues rise above the average; others with below average per capita tax revenues remain below it; some communities with above average per capita tax revenue rise even further above the average; while others with above average per capita tax revenue fall below it.