The city council meeting this Friday is set to launch the budget orientation debate for 2016. As a consequence of the Regional elections, but also due to a near-overload of responsibilities for Christian Estrosi (1), it is taking place belatedly this Friday, February 5th.
This debate is occurring within a context of austerity imposed by the government on local authorities. For Nice, this means a loss of nearly 13 million euros in grants for the coming year. This new cut follows those in previous years. Between 2013 and 2016, the difference amounts to over 28 million euros, compared to a total operating revenue of 542.6 million euros for 2016.
The immediate consequence of this loss of state grants is the confirmation of the reduction in public investments for the years to come. From 96 million in 2013, we fall, for the period 2016-2020, to an announcement of 55 million per year, including the matching fund allocated to the metropolis for line 2. This better illustrates the consequences of the austerity policies initiated by the government and fundamentally shared by the right.
This decline in public investment is significantly detrimental to the local economy and consequently to employment.
It also highlights the poor choices made by Christian Estrosi. The choice of a tunnel for line 2, which equals the total investments of the city of Nice for five or six years. Or the choice of the new stadium, whose attendance, despite the good results of the Gym, matches our forecasts (less than 15,000). The final cost of the stadium for the city (contribution to construction, operating fee, exterior arrangements, etc.) should amount to more than 400 million by the end of the concession (27 years). This is equivalent to the total investments of the city over seven or eight years…
In this budgetary context, the sale of communal assets is merely a stopgap to replenish the coffers. In Nice, what is euphemistically referred to as “optimization of private assets” will amount to nearly 70 million euros for the period 2016/2020, with operations already underway like the sale of Villa Béluga in Cimiez for over 4 million euros. Other “gems” of local heritage may follow, such as Villa Paradiso, whose future is shrouded in uncertainty. In addition to these straightforward sales, there are construction lease operations. After the real estate program accompanying the new stadium, the next significant operation involves the former Visitation convent in old Nice. This operation covers nearly 8000 m2, intended to create a luxury hotel complex, with a rent over the entire lease period (90 years) of 33,780,000 euros, that is, just a few euros per m2/month…
In this context, Christian Estrosi’s announcement of a tax decrease is purely a communication gimmick and does not correspond to reality.
The reason is simple: the rates (residence tax, property tax) are applied to bases (cadastral rental values). For the year 2016, the amount of these bases increases by 1% (2016 Finance Act). For the amount of taxes paid to actually decrease, the allowances would have to remain unchanged, and the residence tax rate would have to decrease by more than 0.20 points (i.e., fall from 21.31% to 21.10%). As of now, Christian Estrosi has carefully avoided announcing a figure…
In fact, if we take 2014 as a starting point, the budget orientation document provided 268 million euros for the revenue from property tax and residence taxes. For 2016, this figure is 287.3 million euros. A 7.2% increase over three years, that’s the reality of Christian Estrosi’s tax cut story.
Another myth is the suggestion that local taxes are lower in Nice than in other cities of similar size. Citing only the tax rate is meaningless if the value of the cadastral rental bases to which these rates apply is not disclosed.
Since the Nice city document does not provide this, I will give you the figures:
Average rental value 2015 (source SFL Forum)
Lille: 1910 euros
Marseille: 2940
Nantes: 3024
Toulouse: 3098
Lyon: 3359
Bordeaux: 3531
Nice: 3650 euros
The only credible comparison is the product of the rate and the rental values. And here the result is indisputable:
Nice: 777
Lille: 640
With public investments faltering, despite significant tax pressure, Christian Estrosi’s 2016 budget for the city of Nice is not looking very promising…
by Robert Injey, PCF/FdG
