Several scenarios in favor of a simplified federal state are possible. Careful consideration should be given to the financial implications for the Brussels-Capital Region of the transfer of income and expenditure from the communities to the regions.
vs.It’s that simple in Flanders. Besides the federal government and parliament, there is only one government and one parliament that has jurisdiction within its borders. But each time there are two in Wallonia and two in Ostbelgien, and there are five in the Brussels-Capital region. For the coherence of the public policy and its readability by the citizen, this is definitely not ideal. Is it not time to allow Wallonia, Brussels and Ostbelgien to enjoy a simplicity that Flanders enjoyed from the beginning?
During our webinars on 22 April and 25 November 2021, Walloon Paul Magnette, Brussels Sven Gatz and Ostbelgier Karl-Heinz Lambertz explained why and how they wanted Belgium to gradually become a purely territorial federal state, like all other federal states of the world. : a Belgium “to four/ met vier/ zu vier”.
A valuable study
Since then, the debate has been enriched by an important scientific study, coordinated by Dulbea (ULB Department of Applied Economics), on the financial implications for the Brussels-Capital Region of a transfer of income and expenditure from the Communities to the Regions up to 2025-2035.
First observation: Community acquisition of skills is necessarily the legacy of a deficit. Indeed, without changing anything in the current mechanisms, the expenditure of the French Community would exceed its income by 12.5% in 2025, according to the report. For the Flemish Community, the calculation is more delicate due to the merger with the Region, but the report estimates that the expenses attributed to it will exceed its income by 17%.
The report then tries to determine what part of the two communities’ revenues would accrue to Brussels in the event of regionalization and what part of the expenses would fall to it. Second observation: on both sides, the percentage of transferred expenses exceeds the percentage of income: 24.2% compared to 22.1% for the French Community, 4.9% compared to 3.3% for the Flemish Community.
Please note: this “overspending” from Brussels is not due to the location in Brussels of many higher education institutions, FWO and FNRS, VRT and RTBF. Indeed, the report breaks down spending for these institutions across regions based on where students and viewers live. So it assumes – reasonably – that in case of regionalization of competences in the fields of higher education, research and media, the regions would cover the cost according to a distribution key of this type and not according to the location of the institutions.
On the part of the French Community, this “overspending” from Brussels is, among other things, rather due to higher expenses in terms of administrative costs (due to the loss of economies of scale) and an adjustment of teachers’ salaries french. speech schools for the salaries of Dutch-speaking teachers and from the Vlaamse Gemeenschap for an additional expenditure in terms of compulsory education and culture.
Consequently, a regionalization of Community powers would lead to a significant increase in Brussels’ primary deficit and its debt. The report estimates that without this regionalization, the regional debt (including the community commissions Cocom, Cocof and VGC) in 2035 would be 29.9 billion ALL or 331% of revenues. In case of regionalization, it will increase to 49.2 billion or 386% of the income (including the transfer of community debts).
Explore and reform
These estimates are sufficient to prove that an immediate and complete transfer of Community income and expenditure, according to the current distribution keys, does not constitute a financially sustainable scenario for Brussels. However, they do not mean that we must now surrender to small, very modest steps, such as the possibility of Wallonia and Brussels enjoying more autonomy in matters of cultural and educational policy. Because they take nothing away from the force of the basic arguments mentioned above in favor of a purely territorial federalism. Therefore, they invite, on the one hand, to examine in detail the articles that explain and sometimes justify excessive spending in Brussels. And they also invite us to explore, as the report predicted, a reform of funding methods. A few numbers help to mark the field of possibilities.
Some possible criteria
Expenditure (excluding interest) attributable to Brussels residents represents 11.9% of total Community expenditure and the revenue that would accrue to them in the event of regionalization 10.7% of total Community revenue. The report mentions that the division of personal income tax by place of work (13%) can be used as a full or partial replacement for the division by residence (8.5%). Regarding the financing of so-called customizable issues, it is also logical to think of using more for donations according to a demographic criterion. A distribution of income in proportion to the total population would give 10.6% of the income to the BCR, while a distribution of all this income (and not only, as today, the distribution of VAT) in relation to the population of school age will share 12% of total income for RBC.
This Wednesday from 5 to 7 p.m., the Re-Bel initiative is organizing a webinar on the question of whether a four-region Belgium remains a credible prospect in light of a recent report by Dulbea (Department of Applied Economics of ULB ) on the financial implications for Brussels of a regionalization of Community powers. The webinar will be held in French and Dutch (with simultaneous translation). It will be moderated by Béatrice Delvaux (Evening) and Karel Verhoeven (From the standard) and presented by Maxime Fontaine and Manon Pierrot (Dulbea). Sven Gatz (Open VLD) and Paul Magnette (PS) will react to it. Pre-registration at rethinkingbelgium.eu