To understand the origin of this voluntary equalization fund, we have to rewind to 2018, and even before. At the time, the question of abolishing the inner-city departments was raised. The hypothesis gained ground during the creation of the Greater Paris Metropolis and its territories, and was not called into question by the new president Emmanuel Macron, who even announced it during his campaign. With the wind rising against their suppression, the departments play as a team to defend themselves, organizing joint actions. Aware that one of the issues concerns the differences in wealth between departments in the region, they propose to create an equalization fund themselves to finance investments. Imagined in 2018, the fund first suffered a first refusal from the State before being able to fully exist in 2020. Endowed with 150 million euros during its first edition, it was funded by the seven suburban departments, but with much greater contributions from Hauts-de-Seine (34%) and Yvelines (21%), compared to, for example, 11% from Val-de-Marne and 9% from Seine-Saint-Denis. Subsidies, on the other hand, were greater in the less wealthy departments. Concretely, the fund contributed to road and tramway projects, etc. In Val-de-Marne, it helped finance the Champigny rainwater depollution station and the reopening of the Bièvre.
Since then, the fund has been renewed every year. The distribution keys have changed slightly, but with the same logic of strong contribution from Hauts-de-Seine and Yvelines, and an overall amount hovering around 150 million euros.
A tool that fulfilled its objectives
The Regional Chamber of Accounts, which looked at its cradle for the years 2019-2022, concluded rather favorably on this initiative, welcoming “an original voluntary equalization mechanism targeted at investments only”and an equalization objective “completed” after four years. “Thus Seine-Saint-Denis is the main net beneficiary of the Fund for nearly €117 million between 2019 and 2022, followed by Val-d’Oise (€49.6 million), Seine-et-Marne (43 M€) and Val-de-Marne (33 M€). Conversely, the Hauts-de-Seine department is a net contributor of €193 million and that of Yvelines €118 million.”detailed the CRC, while inviting the establishment to specify its objectives, its strategic priorities in terms of investment, and to formalize certain documents. View the report
Equalization hit by the real estate crisis
A great story which has just been suspended, at least for a year, due to the fall in departmental revenue, part of which comes from a tax on real estate transactions, transfer taxes for valuable consideration (DMTO) . A real estate market which has collapsed due in particular to rising interest rates and the difficulty in obtaining loans. Leveraged from fewer transactions, at slightly falling prices, transfer taxes have fallen, and this has not spared the departments of western Paris. In Yvelines, it is expected to fall by 20% in 2024, and in Hauts-de-Seine, they have already fallen by 30% in 2023 and the trend will continue in 2024.
It is in this context that the FS2I Board of Directors, meeting at the end of September, decided not to replenish the fund in 2025, at this stage. “We will use the reserve, which is around 10 to 15 million euros. It will be redistributed with the same distribution keys”, explains Olivier Capitanio, president of the Val-de-Marne departmental council. An amount which represents less than 10% of the amount usually spent, and will constitute a shortfall for the beneficiary departments. “Around 10 to 12 million euros for Val-de-Marne.” An amount closer to 30 million for Seine-Saint-Denis.
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