The Financing Arrangements for the Regional (Autonomous) Governments for the Period 1997-2001

Fiscal decentralisation has been one of the key features of developments in the Spanish public sector in recent decades. There has been a gradual shift of responsibilities for the management of certain services form the State to the regional governments along with development of the arrangements for financing these responsabilities. This paper focuses on analysing the financing arrangements for the RGs, describing those currently in force for the ordinary-regime RGs' resources is discussed. This information shows that only about 30% of resources are obtained directly from taxpayers and, therefore, help to increase the degree of fiscal co-reponsibility of the RGs, while the majority, the other 70%, come from other general government bodies. With the new agreement for the period 1997-2000, the relative weight of tax resources rose by almost 10 percentage ponts of GDP, especially as a consequence of the incorporation of the regional tranche of the personal income tax for the ordinary-regime RGs which accepted the agreement. The relationship between transfers and tax resources is the reverse in Navarre and in the Basque Country.