The main stumbling block for setting the 2024 budget was the argument between the Partido Popular and Vox regarding the free choice of language in schools. Vox, who are not formally part of the Balearic government, had linked its demands regarding language to the setting of the spending ceiling, the first step in finalising the budget.
There is now agreement and so the government can proceed with presenting the budget for parliamentary approval. One aspect of this, it is understood, will be a reduction in income tax. The rate for people who earn less than 30,000 euros a year is set to come down by half a percentage point. Above 30,000 and it will fall by 0.25%. There will also be an increase in the personal minimum.
Despite these planned cuts, the government forecasts that revenue from income tax will rise by some 500 million euros. IVA (VAT) revenue is expected to increase by 100 million euros. The total budget will also rise - by around ten per cent to 7.3 billion euros, a part of which is repayment of debt.
Revenue from the property transfer tax is calculated to fall significantly from 978 million euros in 2023 to 844 million. Income from the wealth tax will be much the same - a rise of one million euros to 86.4 million. Although the agreement for government between the PP and Vox includes the elimination of this tax, it will remain in force for the government's first year, with the intention being that it will be scrapped before the end of the four-year PP administration.
Changes to the financing system - what the Balearics receive from Madrid - help to explain why the budget will grow by ten per cent. At present, there is little indication as to how spending will be allocated, but it is believed that the health ministry's budget will top 2,000 million and that education will be around 1,300 million. There are to be specific funds for housing programmes and for water treatment plants.