Spanish Socialists tighten purse strings of local government

The Spanish Treasury is getting tougher on bankrupt city halls in an effort to impose private-sector efficiency on public administrations. The three-month-old Socialist government plans to tighten the municipal purse strings after paying off longstanding debts up to December 1982. ''The state budget isn't a bottomless bag. City halls, as well as government institutions, are going to have to learn to administer their own funds,'' a highly placed government official said. ''We're giving them a clean slate to start with by wiping out old debts.''

Nevertheless, one of the first victims was Las Palmas, one of the capital cities of the Canary Islands (population 350,000). The city was unable to pay a long-overdue electricity bill. The state-controlled utilities company, Union Electrica de Canarias (UNELCO), was unimpressed by pleas of poverty, and decided to treat city hall like anyone else. In early February, UNELCO cut off the city's nonessential electricity. Only a week before, the city was unable to refill the municipal-police gasoline tanks. For a day, practically all municipal-police motorcycles and cars were grounded for lack of gas.

''We gave fair warning, and finally decided to cut off all the artistic and monumental illumination, sports-stadium lighting, fountain illumination, and other nonessentials, until they can pay us at least 10 percent of their bill,'' a UNELCO source said. The utility debt amounted to 495.5 million pesetas ($3.78 million) according to UNELCO, and the monthly bill averages about 23 million pesetas ($175,572).

Street and office lights were not cut ''for public-order reasons.'' Las Palmas deputy mayor Santiago Falcon Perez said a token 10 percent was finally paid, ''as a sign of good will.''

Mr. Falcon, belonging to a center party, Union of Democratic Center, claimed the utility's overdue bill was the result of earlier city administrations.

''We get no government subsidy for this, although the government said they were going to cover all longstanding debts,'' claimed Mr. Falcon. But the government bailout applies only to municipal loans.

Another Socialist Treasury official, said the state simply couldn't pick up the bill for everything mismanaged by government ministries or city halls. ''Some ministry departments or public institutions are used to calling up the Treasury for more funds, claiming that the electricity or the phone is about to be cut off for unpaid bills,'' he said. ''Now we're going to tell them 'too bad.' They'll learn quickly how to handle their budget just like any private company.''

A UNELCO executive agreed that the Las Palmas administration obviously has more expenses than income, but added, ''They are going to have to establish priorities like everyone else. I'm sure that in other countries the city halls pay their most important bills.''

Mr. Falcon said the city was studying a ''restructuring of the budget'' in addition to better ways to increase income. ''Actually, the day with no gas didn't involve much money, only about a million pesetas ($7,633), which really isn't a problem for a city hall. But at the time, we didn't have the cash on hand, so we decided a grounding would be a good dramatization of the need to cut expenses.'' Mr. Falcon said gasoline consumption of the city police force dropped 45 percent after the grounding. ''Now everyone is more careful about what they consume,'' he added.

At present, 7 percent of the national budget is spent on the 9,000 municipalities in Spain. In addition, the government has set aside 13.5 billion pesetas ($103.05 million) to help city halls pay back loans. ''Cities have to get along with this,'' explained a Socialist spokesman on regional and local economic policy. ''When they use it up, there's no more.'' The Socialist government plans to introduce legislation to go into effect Jan. 1, 1984 that will give municipalities more tax-collection authority to help sop up all the red ink.

Meanwhile, other cities in the red have come up with income-boosting innovations. Madrid cracked down on traffic violations and increased fines, and intends to take away drivers' licenses for three months after six unpaid fines. Many cities have decided not to rely on owner evaluation of property values, and are sending out inspectors to assess property for local-tax purposes. And regional governments have issued public bonds to help pay debts.

Utility-industry sources claim the policy of cutting off electricity to public institutions is perfectly legal, although it rarely happens. But such cutoffs may increase with the government's no-bailout policy. State-controlled utilities like UNELCO are also under pressure to be profitable.

''If the utility companies were to cut off electricity in all the city halls with unpaid bills, over half of Spain would be blacked out,'' a utility-industry source said, half seriously.

QR Code to Spanish Socialists tighten purse strings of local government
Read this article in
QR Code to Subscription page
Start your subscription today