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Minister calls for fairer distribution of funds between Brussels municipalities

Illustration shows the name of the Ganshoren municipality on a road sign. The municipality comes bottom on a list of allocations paid from the budget of the Brussels Region. (BELGA PHOTO THIERRY ROGE)
06:11 12/01/2022

The glaring disparities in the way the Brussels municipalities are financed must be addressed, according to Brussels' minister of local government Bernard Clerfayt. The mechanism which is used to calculate the distribution of funds must be revised to take better into account the differences between municipalities and their socio-economic realities, he said.

Clerfayt commissioned a review of the finances transferred from the region to the municipalities and a comparative study of the financial resources of the 19 municipalities to find out whether the municipalities have the same resources to provide services to their inhabitants. The results of both showed that this is not the case, and it is better to live in Saint-Gilles than in Ganshoren, or in Ixelles than in Anderlecht.

The report of the study contains the resources available to the municipalities per inhabitant. These come from their own income, such as taxes and services, but also from the general allocation to the municipalities paid by the Brussels region.

For example, the City of Brussels tops the list with €3,591 per inhabitant while Ganshoren is bottom with €1,226 per inhabitant. In the middle are Ixelles (€1,986/inhabitant), Saint-Gilles (€2,153/inhabitant) and Etterbeek (€1,841/inhabitant). It also appears that the municipalities opt for different tax rates (for personal income tax and property tax) depending on their financial situation.

The general allocation to the municipalities is supposed to correct these excessive differences. "The difference in resources between the municipalities is one to three,” said Clerfayt. “That's a huge difference.”

“Consequently, the ability of the municipalities to provide the basic services is not identical,” he added. “The financing mechanism of the Brussels municipalities is not sufficiently based on the principle of solidarity. It needs to be revised to take into better account the differences between municipalities and their socio-economic realities. This is a question of cohesion for the region and of fairness between citizens."

There are several ways to adjust the problem. It can be done by revising the criteria for the general allocation to the municipalities in order to reduce the differences. This is also stated in the coalition agreement. A second approach aims to adapt the other mechanisms for subsidising municipalities according to their financial situation. The subsidy percentages would depend on a criterion related to the financial capacity of the municipality.

Finally, for each subsidy to the municipalities, a criterion should be systematically applied that is linked to the number of inhabitants who are, ultimately, the first beneficiaries.

Written by Nick Amies