commission on fiscal imbalance 合集

Ecotaxes will be analysed in the section devoted to

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Unformatted text preview: ich the federal government contributed each year to the financing of university instruction offered to foreign students. The amounts determined in respect of each community in 1989 (1 200 million BEF for the French-speaking community and 300 million BEF for the Flemish community) were adjusted each year to changes in the average consumer price index. In addition, these amounts could be adjusted to reflect the possible financial consequences for the communities of decisions made by the federal government in the course of exercising its fields of jurisdiction. Table 2.1 indicates the amounts of the three sources of financing described earlier. 9 10 Once again the 20/80 allocative key. Special financing act, section 62. 197 Commission on Fiscal Imbalance 2.1.2. The Saint-Michel and Saint-Quentin agreements in 1993 The method of financing the communities and regions implemented under the institutional reforms of 1988-1989 was deemed, at the time, to be fairly complete, although it was not permanent. Less than four years later, in 1993, it was necessary to somewhat modify the method11. Indeed, it turned out that the methods adopted in 1989 to calculate the breakdown of budgetary resources put the French-speaking community in a difficult position since it was incapable of financing education, mainly because of pay increases granted to teachers. It is important to mention that wages represent 80% of the expenditures of the French Community. To solve this problem, the so-called Saint-Michel agreement was signed. It led to the special act of July 16, 1993 amending the special financing act of January 16, 1989. 12 A community-region merger based on the model of the merger carried out in Flanders13 could have helped solving the financial problems in the French-speaking Community, but this possibility has been rejected by the French-speaking authorities. Nevertheless, a solidarity mechanism has been designed between the French-speaking entities through the so-called Saint-Quentin agreement, which put into effect the new section 138 of the Constitution. This agreement concerns only French-speaking entities. Let us recall that at that time, in exchange for its participation in the two-thirds majority needed to complete the federal structure of the State, the ecologists demanded and obtained the introduction of ecotaxes (environmental taxes), a new form of regional tax as contemplated by the section 3 of the special financing act. Ecotaxes will be analysed in the section devoted to regional taxes. Two types of amendments were introduced into the special financing act by the Saint-Michel agreement with a view to increasing the funds allocated to the communities. The first measure concerns the personal income tax transfer. The portion of personal income tax earmarked for the communities increased by 4.5 billion BEF in 1993. Moreover, starting in 1994, real growth in gross national product was taken into account in the annual change in the overall amount of the personal income tax transfer earmarked for the communities and regions. The second measure concerns the radio-TV fee and marks a chan...
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This note was uploaded on 03/06/2013 for the course ECON 220 taught by Professor Paulo during the Spring '13 term at University of Liverpool.

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