Incredible but true! The Balearic government has a funding crisis. I say incredible because the government has introduced measures over recent years to raise extra cash but it is still not enough.
The controversial tourist tax raises in excess of 100 million euros for the Balearic government which has a financial black hole in its budget. Instead of repaying the big debt mountain the government may have to borrow more money to balance the books.
All this at a time when the Balearic government claims that the tourist industry is in a healthy state and revenue should be on the rise.
Granted that the Balearics are still seeking extra money from the central administration in Madrid but I must say that I find it rather difficult to understand why the government is in such financial dire straits.
The economy is growing, not as much as was hoped but it is growing, and overall the Balearics appears to be in a good financial situation although there are big concerns over the summer season, but from the industry rather than the government. Some sections of the tourist industry would like to see the tourist tax actually scrapped which would make the funding crisis at the Balearic government even more pronounced.
There is no quick financial fix, although some political parties have called for the number of civil servants to be reduced and the actual local government scaled back. More cash will have to be found and soon if a financial crisis is to be averted.
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