The financial situation of coastal departments has improved, according to the AFL local government bank

Les finances du département des Pyrénées-Orientales s'est améliorée, selon le baromètre d'AFL, sur la santé financière des collectivités en France. MAXPPP – MICHEL CLEMENTZ

Agence France Locale, a public development bank created by local authorities, published the Barometer of the financial health of local authorities this summer. While the financial health of the departments of Languedoc Roussillon is on a good dynamic, that of the coastal municipalities is much less so. Explanations.

“The coastal departments are doing much better, but the coastal municipalities are in a rather difficult situation”. Director of commitments and expert in local finances at Agence France Locale, Yann Doyen sums up the financial state of the communities of Languedoc Roussillon as follows. A public development bank created by the communities, the AFL published this summer the Barometer of the financial health of local authorities in France.

It emerges first of all that in Languedoc Roussillon, the departments have improved the state of their finances. “Over the last five years, we have observed a real improvement in the situation in the region, driven by the coastal departments, particularly Gard, Hérault, Aude and Pyrénées-Orientales”, explains Matthieu Bierce, from the AFL.

“The situation in Lozère is stable, as is that of Hérault”

As for rural departments, such as Lozère and Aveyron, “the situation is a little different”. “Lozère is full of small towns, with good marks for their financial health, comments Yann Doyen. This is notably linked to the fact that there is not much investment. Its situation is therefore stable, like that of Hérault".

But the departments are coming out of a "very complicated" 2023. "For the second consecutive year, they have seen their tax revenues fall, while they have to face high expenses", continues Yann Doyen. Faced with this "budgetary equation", they have constantly “to call on the government to find an emergency solution, but also a more structural one so that tomorrow, they can have resources adapted to their missions and skills”.

The real estate crisis has impacted the resources of local authorities

The financial fragility of departments, as well as municipalities, is due to the decline in real estate transactions observed in recent years. “They are suffering from the crisis in the real estate market, which is causing a drop in the transfer taxes they receive”, continues the director of AFL. The latter, which represent up to 20% of tax revenues, have caused the departments to lose “40% of their savings in 2023”.

As for the municipalities, it is mainly those located along the coast that are suffering. “Structurally, a coastal municipality is different from other municipalities, recalls Yann Doyen. It must manage a sort of contradiction, a complicated equation insofar as it is often of average size, but that it faces, in the summer, a population multiplied by 5, or even 10".

The municipalities of the region are doing less well than the national average

The sudden increase in population during the summer season requires investments that are out of all proportion to its true population level. “It must equip itself with public facilities, networks, particularly water, sanitation, etc. It must therefore invest and spend much more”. The AFL barometer shows that “the communes of the Languedoc coast are in a more strained financial situation than the average of communes at the national level”.

The average financial ratings given by AFL to the communes of Languedoc Roussillon (reflecting the practice of banks) is 2.67, when the national average is 2.73 (this ranges from 1 for excellent to 7 for very poor). The explanation does not seem easy in the eyes of those responsible for the barometer. “Is it because they have a very high investment rate ? Is it the nature of tourism that has an effect on income, as on the Côte d'Azur ?", they wonder – In any case, they make the following observation : “The coastal departments are driving the region's growth, but the coastal municipalities in these departments are outside this movement".

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