This work analyze the relationship between the evolution of the local budgetary indicators during the economic crisis and relationship with the size of the municipality to know the impact of this crisis in the Spanish Town Councils and the measures taken between 2006-2014. The analysis of the local budget has been taking a greater importance in recent years, primarily due to the need to know the efficiency of municipal budgets. At the international level, the study of the local budget as a need to provide information with which to perform a financial analysis, has been evidenced both by institutions such as the Federal Accounting Standards Advisory Board and by authors who have studied the local budget (Clark, 1994; Kiewiet and Szakaly, 1996; Zehms, 1991). In the Spanish context, different authors have addressed the budget issue municipal (Suárez et al, 2008; Caramés, 2005; Stephen, 2007, Benito and Bastida, 2010, Suárez y Fernández, 2012, or Perez et al, 2013 by quote some of them), and the studing the local indicators and indices that could help to improve the transparency and efficiency of the municipal budget (Cárcaba, 2003 or Caramés, 2005, among others). In this work we have used budgetary indicators premises and we calculated for different population stratum. The index of deficit or surplus, IDS, it is defined as the capacity or the need for financing the local entities throughout the period analyzed. In 2014, after the crisis, the municipalities have improved the IDS 2006. Although in 2010 some municipalities had a positive IDS, was very close to zero and the following year, the indicator was negative sign, so they were the municipalities of more than 1 million inhabitants and those of less than 5,000 inhabitants that they got a more rapid recovery, while in 2011 were the only ones who obtained positive values of this indicator and from that year, all strata of the population obtained a value positive in 2014.
The indicator of financial autonomy, AF, is defined as the ratio between the income by local taxs and the total income. In recent years, the Spanish municipalities have been gaining financial autonomy, since the growth rates for the period are positive in all the stages of population, although these values, for 2014, in no case exceed 70 per cent but have exceeded in all strata, the initial values for 2006. The municipalities with the highest level of financial autonomy in 2014 are those that are between 50,000 and 100,000 inhabitants.
If we consider its evolution, this indicator declined for all municipalities in Spain in 2009 and, from that year, rose until 2011 to return to be reduced in 2012 in all municipalities, except in the group of less than 5,000 inhabitants, so that were those that were recovered in the first place.
Other indicators used are the gross and net savings. We can define the gross saving as the difference between the income and expenditure of current character and its relationship with the net savings would be the result of subtracting the gross saving the financial liabilities of the expenditure budget. To relativize the figure of gross saving and the net savings we have divided both figures by the current income (AB/IC and AN/IC).
This magnitude was reduced in the years 2009 and 2010 and from that year has gone on increasing until reaching in 2014 a value slightly higher than in 2006 for the total number of municipalities. However, all municipalities with fewer than 500,000 inhabitants - except for those which are between 20,000 and 50,000 inhabitants - have seen reduce its gross saving from the beginning until the end of the period considered. In 2014 are the municipalities with more than one million inhabitants which have a higher value of this indicator, the 29.9 per cent higher than in 2006 by more than five percentage points.
The net savings presents negative sign some years in the municipalities between 500,000 and 1,000,000 inhabitants, so you should devote other resources such as those from the operations of capital or the financial operations to cope with everyday expenses and depreciation, which put these councils in a difficult situation in 2008 and 2010.
Finally, we believe that there is another indicator that can bring us closer to know how they have met the economic crisis the local entities and is the indicator of the rigidity of the current expenditure, IRGC, which measures the relationship between staff costs more financial expenses and the current expenditure. This indicator has grown over the period if we look at the whole of the Spanish municipalities; however, when we divided according to sections of the population, for the municipalities of more than 100,000 inhabitants the indicator practically has remained, what have been the major municipalities that have made greater policy of reducing staff costs.
If we analyze jointly all indicators, we can see how all municipalities have improved the IDS in this period but have been mainly the municipalities of more than 500,000 inhabitants in forward, have had a higher rate of growth of this indicator over the period, starting in 2006 the lowest values of all strata of the population analyzed.
The AF has been improved for all strata of the population and the municipalities of between 5,000 and 500,000 inhabitants are self-financing in values higher than 60 per cent, with values even higher than in 2006, so that the economic crisis has made that municipalities try to obtain a greater amount of tax revenue with which to perform their public expenditure policies.
Therefore, these two indicators, IDS and AF, have evolved positively for all local entities. However, the ICFR has increased from the beginning to the end of the period and this has been as a result of the need to cope with the costs arising from the financial burden and the amortisation of financial liabilities and it has increased the percentage of income that have had to be used to deal with the public debt. This ratio is particularly worrying for the municipalities of more than 1,000,000 inhabitants in 2014, because they had to devote 35 per cent of the income flows to the financing of the debt.
The municipalities with fewer than 5,000 inhabitants have increased their AF up to 51,3 percent in 2014, below the value of this indicator in the case of contemplating total municipalities (58.7 per cent), but its ICFR is much lower (7,6 per cent and 17 per cent, respectively) and the AN is still higher around 9 points. Therefore, it seems that these local entities have opted for a more conservative policies, turning to a lesser extent to the debt that the rest of strata of the population that present higher values of ICFR. In relation to the IRGC, has increased in 2014 in three points with respect to 2006 (45.1 and 42.3 respectively), so that these municipalities have not made an effort to reduce this type of expenditure with some rigidity in the local budget.
This situation is practically the opposite that in the case of the municipalities of more than 1 million inhabitants - Madrid and Barcelona- who opted to significantly enhance its debt as a reaction to the economic crisis, whose reflection is a very high relative ICFR, 35,1 percent, well above the 17 per cent obtained for the total number of municipalities. These municipalities, in 2014, his AB is the largest of all strata of the population analyzed (29,9 per cent), while the AN is lower (0,2 per cent). However, in these municipalities, the rest of the indicators have improved with respect to 2006. Thus, presented the highest IDS of all the strata of the population analyzed (17,3 vs. 12,5 per cent for the total number of municipalities), and the maximum value of the AB/IC (29,9 per cent). In addition, these municipalities have the minimum IRGC 2014, six times lower than that of the total number of municipalities (39,5 percent and 46,6 percent, respectively).
The values of the indicators obtained may serve the local manager to compare, as reference values to those of its particular municipality and draw conclusions that will contribute to the improvement of the local budget management. This work presents the limitation of having analyzed groups of municipalities. However, in future work could be addressed other indicators and its evolution, the study of a group of municipalities in the raised here or a more disaggregated analysis of the municipalities, which could bring other points of view with which you can make contributions to the study of the local finance Classification-JEL: R1 Keywords: Municipios, Presupuesto, Indicadores, Crisis económica, Déficit, municipality, Budgets, Sustainability indicators, Economic Crisis Pages: 207-237 Volume: 3 Year: 2016 File-URL: http://www.revistaestudiosregionales.com/documentos/articulos/pdf-articulo-2509.pdf File-Format: Application/pdf Handle: RePEc:rer:articu:v:3:y:2016:p:207-237