The health service has the largest slice of the Balearic budget, but the regional financing system is said to be insufficient for essential services. | Archive


Under the regional financing system for 2024, the Balearic contribution to solidarity funds for other regions is 1,226 million euros, up from 1,040 million in 2023. To balance this (up to a point), there is the so-called convergence fund. When payment of this to the Balearics is taken into account, the contribution is 276 million euros.

There are typically no more than three regions which are net contributors to the system. One is the Balearics. Madrid is another. Catalonia is the third but hasn't always been.

The current Balearic government agrees with the principle of solidarity funding but like its predecessor wants a review of the system. The formula expired in 2014 but has continued to be applied ever since. The Spanish government is being urged to open a debate on reform of the system once and for all.

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For the Partido Popular administration, and it was much the same when Francina Armengol was president, a key factor to be taken into account is population. This has increased more than other regions. It is therefore argued that current arrangements are insufficient in meeting demand for essential services.

The Prohens government wants compensation for insularity to be maintained and its weight to increase under a new financing system. A third consideration is the principle of ordinality. This means that if the Balearics rank second in terms of the most per capita tax revenue for the Spanish government, the islands should not then rank ninth or tenth in terms of what is received from the Spanish government.

The solidarity and convergence funds are only part of the overall financing system. The bulk of what the Balearics receive from the Spanish government comes from income tax and IVA (VAT). Spain's finance minister, María Jesús Montero, has in fact indicated that the Balearics will be receiving record financing - 3,981 million euros, up 400 million on 2023.

The amounts for income tax and IVA are very similar - 1,777 million euros and 1,798 million euros respectively.