Bill would let city councils spend their surplus on public services

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1. The bill, introduced by Unidos Podemos and admitted for processing on October 10, 2017, proposes to change the spending rule of Organic Laworganic law A law on fundamental rights, the electoral system or other matters the Constitution reserves. It needs an absolute majority in the Congreso: 176 votes. 2/2012 so that Local Corporations that meet the principles of budgetary stability and financial sustainability can reinvest their fiscal surplus in the public services under their authority.
2. The bill proposes that the spending rule would not apply to Local Corporations with a budget surplus or balance, debt below 110% of their current resources, and an average supplier payment period below 30 days.
3. Several provisions of Organic Law 2/2012 would be repealed: section 5 of Article 12, the last paragraph of section 4 of Article 24, Articles 25 and 26, section 1 of Article 32, section 8 of the first additional provision, and the sixth final provision.
4. Section 2 of the fourth additional provision would be amended so that a situation of risk of default on debt payments, as determined by the Government at the proposal of the Minister of Finance, is considered to seriously harm the general interest.
5. The law would have basic character, issued under the State powers in sections 13 and 14 of Article 149.1 of the Constitution on general planning of economic activity and general Treasury and State Debt.
6. The law would take effect the day after its publication in the Official State Gazette, except for measures that increase budget credits or reduce revenues for the current fiscal year, which would take effect in the next budget year.

Who it affects

• City councils and other Local Corporations: They could reinvest their surplus in public services if they meet stability, debt limits and payment deadlines.
• Central Administration and Autonomous Communities: The spending rule would still apply to them, with spending growth limited by the reference GDP growth rate.
• Central Government: It would keep the power to determine that risk of default on debt payments seriously harms the general interest.

Words worth knowing

Regla de gasto (spending rule)

A limit on how much government spending can grow each year, based on forecast GDP growth.

Corporaciones Locales (Local Corporations)

Local government entities, such as city councils and provincial councils.

Estabilidad presupuestaria (budgetary stability)

The duty not to spend more than you take in, that is, to keep a surplus or balanced budget.

Sostenibilidad financiera (financial sustainability)

A government's ability to carry its debt without payment problems.

Remanente de tesorería (treasury remainder)

Money left over in the accounts at the end of the fiscal year that can be used the following year.

organic law

A law on fundamental rights, the electoral system or other matters the Constitution reserves. It needs an absolute majority in the Congreso: 176 votes.

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries