2027 Budget: Regions and inter-municipal authorities warn of the risk of new levies

With less than three weeks to go before the presentation of the 2027 budget bill, representatives of inter-municipal authorities and regions are calling for consultations with the government. They fear further cuts that could reduce their investments, particularly in public infrastructure, training, and apprenticeships.

With the presentation of the draft budget law for 2027 expected on September 30th in the Council of Ministers, local authorities are concerned about the lack of information on the budgetary measures envisaged by the Government.

Intercommunalités de France is therefore requesting an urgent meeting with the Minister of Public Accounts, David Amiel, in order to initiate a dialogue before the finalization of the text.

"The lack of government communication on the measures envisaged, less than three weeks before the presentation of the budget, is incomprehensible," the association stated.

New and dreaded trade-offs regarding local investments

The inter-municipal authorities had already strongly contested the provisions of the 2026 budget, which they considered disproportionate in view of their weight in the operating expenses of all the local authorities.

They believe that an equivalent, or even greater, contribution in 2027 could lead some local authorities to postpone or abandon investments. These decisions could affect public facilities, urban planning, transportation, building renovations, and services offered to residents.

"An identical or even amplified contribution would have serious consequences for some communities, which would have to put a stop to many investments, to the detriment of the inhabitants," warns Intercommunalités de France.

The FCTVA established as a red line

Intermunicipal elected officials are particularly opposed to any unfavorable changes to the Value Added Tax Compensation Fund (FCTVA). This mechanism constitutes the main form of state aid for local government investment by compensating for a portion of the VAT paid on their capital expenditures.

Intercommunalités de France therefore rejects "any framework, limitation or reform" of the FCTVA which would reduce the resources available to finance local projects.

The regions are denouncing the cuts to training

Regions of France also expresses its opposition to a new financial contribution, which it does not want to see "as brutal and disproportionate" as the previous ones.

The association is particularly critical of the government's decision to end regional skills investment pacts, with a planned reduction of €527 million. These agreements contribute to financing vocational training for job seekers and those furthest from the job market.

"The State's decision, in the middle of summer, to unilaterally break the regional skills investment pacts (-527 million euros) (...) constitutes a betrayal of the trust that the Regions have placed in it," says Regions of France.

The regions are also raising concerns about the state's withdrawal from the apprenticeship support fund, valued at €134 million. They describe this decision as "the final blow for craftspeople and very small businesses," which are particularly dependent on apprenticeships to train and recruit new professionals.

VAT revenues at the heart of concerns

No amount concerning a possible contribution from local authorities to the 2027 budget has yet been officially communicated by the Government.

According to reports in Les Échos, the government is considering taking a portion of the increase in VAT revenue redistributed by the state to local authorities. Regions of France believes such a measure would constitute a further drain on their resources.

In 2025, VAT revenue allocated to local authorities amounted to 52,7 billion euros, according to the Observatory of Local Public Finances and Management.

When asked about these concerns, the office of the Minister for Regional Planning declined to comment.