Palma And 100% Tourist Tax

The Balearic parliament got down to business this week after its extended winter break. The tourist tax was top of the agenda; the spending thereof. The main discussion, brought up by the Partido Popular, concerned investments for the town halls, which had received none directly. Away from parliament, mayors were convening to consider this, and it was mayors from the PP who were the most strident in demanding some action. They were suggesting that the Felib association, which is the town halls' body, should take the matter to court and seek legal review of the way in which the revenue has been spent.

In the end, the mayors decided on a more conciliatory approach, but not without raising the possibility of pursuing an amendment to the tax legislation and establishing a fixed amount which should go directly to municipalities. They also wanted greater clarity and transparency in respect of revenue spending.

For a government which has made so much of being transparent and of engaging in consensus and dialogue (a point not lost on the PP during parliament's debate), the implication of an absence of transparency will sit uneasily. Or it should do, not least because Felib is represented on the committee which decides how the tax is spent. If it felt that there was some opacity, then something was clearly wrong in the decision-making process.

The government, it has to be said, has created a rod for its own back by, on the one hand, wishing to be participative and involving so many organisations on the spending committee and, on the other, totally failing to be more evenhanded with the distribution of revenue. President Armengol accepted that expectations had been raised and had not been met, but she reminded everyone that there had been the priority for water projects and that the actual pot (30 million) was substantially lower than that it will be next time round.

The trouble is that all the various interested parties do expect, and they have every right to expect. Otherwise, why are they participating in the decision-making and getting nowhere? Biel Barceló didn't help to allay their concerns by saying that the tax is not a distributive system, i.e. everyone doesn't automatically get a share. I'm sorry but that's exactly how it is seen, and the government needs to address the criteria for distribution with some urgency. If not, then the arguments will grow louder.

The extent of the discontent could be found in statements such as that of the Farmers Union. While agriculture is receiving some consideration in the revenue spending, the union - especially against the backdrop of drought and floods - was aghast to note that the Balearic Symphony Orchestra will be having money spent on it.

No one is satisfied, especially not Palma. The tourism councillor, Joana Maria Adrover, is waiting on information to show just how much tax revenue Palma contributed. Once the town hall knows this, it will be agitating that, in effect, it keeps all that revenue for itself. A further problem for the government is that it risks appearing hypocritical if it were to totally dismiss the demands of Palma and other town halls (especially those with high levels of tourism). While it is seeking a new financing system which will have less emphasis on the Balearics subsidising poorer regions of Spain, it cannot play the "solidarity" card and insist that Palma should accept a subsidising function. It might sound like greed on behalf of the town hall (and I for one don't think it should be treated in such a preferential manner), but it does have a point. There again, so also would Calvia, Alcudia and other main tourism municipalities.

Palma will doubtless be taking note of developments in Catalonia. The government there has agreed to increase to 50% the amount of tourist tax revenue which goes to the municipalities. Barcelona, while welcoming this development, is insisting that it should have all the revenue which the city generates, which is exactly what Palma is inferring it wants.

The tourist tax spending has opened up a can of worms. The government has some hard thinking to do in order to prevent rows in the future; ones which eventually might find their way to the courts.