2021 Municipal Solidarity Fund approved

In the session of January 12, 2021, the State-City Conference approved the decree scheme for the allocation of the Municipal Solidarity Fund - FSC for 2021. This is an important institutional step that incorporates some methodological innovations in the determination of Standard Needs introduced with the revision approved in September 2020.

What is the Municipal Solidarity Fund

The Municipal Solidarity Fund is the Fund aimed at ensuring an equitable distribution of financial resources to the municipalities and is fed with a share of the IMU revenue pertaining to the municipalities themselves. The FSC was established in 2011 as part of the overall plan inherent to municipal federalism, i.e. at the time when the financial relationship between the State and local authorities was profoundly redesigned through the suppression of traditional state transfers and their replacement with their own revenues and resources. of an equalizing nature.

The fund's distribution criteria are established by law and are divided into two components: a "restaurant" and a "traditional" one. The first component is divided on the basis of the actual revenues of IMU and TASI, with the aim of compensating the municipalities for the lower revenues due to the various local tax exemption schemes approved over time.

The second component, the traditional one, is assigned, in part, according to the criterion of the compensation of historical expenditure, and in part, for the municipalities of the Regions with Ordinary Statute, through equalization criteria based on the difference between fiscal capacity and standard needs. Basically, if a municipality has a fiscal capacity lower than its standard financial requirement, it receives a larger share of the fund while if a municipality has a requirement lower than its fiscal capacity, a reduction in the amount due will be applied.

The share of the FSC attributed according to equalization criteria is incremental and the law establishes gradually higher percentages in order to completely overcome the historical expenditure criterion in 2030.

The news for 2021

Neutralization of the waste component - With the distribution of the FSC 2021, the complete neutralization of the effects generated by the waste component on the calculation of the difference between fiscal capacity and standard requirements is accomplished, in line with the decision by the Technical Commission for Standard Requirements - CTFS in the session of 13 October 2020. The new methodology developed by SOSE and approved by the Commission provides that the waste function is excluded from the calculation of the allotment because the revenue generated by TARI fully covers the cost incurred for the municipal waste collection and disposal function.

New methodology for standard needs - The distribution of the FSC 2021 takes into account the methodological innovations approved by the CTFS on 30 September 2020 with the approval of the FAS 2021 Note prepared by SOSE and concerning the determination of standard needs for the social function of the municipalities and for the viability and territory function.

The social function - This term refers to the services of the social sector (without considering the nursery school service which is estimated separately) which include a multiplicity of services aimed at the municipal area and which affect numerous groups of users: minors, young people, the elderly, families, people with disabilities, people addicted to alcohol or drugs, people with mental health problems, immigrants and nomads, as well as adults with socio-economic distress.

For all these services, while in the previous methodology the regional differentiations were considered in the analysis of expenditure, the so-called "regional dummies", in the new methodology a territorial specification at the provincial level is considered which is considered more suitable for capturing the elements which differentiate the various levels of expenditure.

In this way, all municipalities will gradually be able to adapt their social services to those of the most virtuous realities.

The viability and territory function - The new approved methodology significantly changes the weight of the variable linked to the population in determining the standard financial requirement for the performance of this function and in this sense the change introduced meets the requests made by the local authorities themselves over time.

The main variable, in fact, is no longer represented by the population but by the number of “total real estate units”, given by the sum of the total number of houses, appurtenances and non-residential properties. This variable was judged to be more suitable for capturing the differentiation of expenditure of Local Authorities while the population maintains an important role within the new function, managing to grasp the situations of greater density