Spain's indebted cities target dog-lovers, fortune-tellers for cash
By Clare Kane
MADRID (Reuters) - Beggars, dog-lovers and fortune-tellers who venture onto Madrid's busy streets may soon find themselves out of pocket as authorities in the city and elsewhere seek creative solutions to their financial problems.
The Madrid council laid out plans this week to levy fines of 750 euros ($1,000) for public activities including soliciting for money outside shopping centers, feeding or washing dogs, reading tarot cards and performing acrobatics with a bike.
Saddled with huge debts since a property bubble burst in 2008, Spain's autonomous regions and town halls have seen core revenues fall as unemployment holds stubbornly above 25 percent and corporate investments dry up. Many owe millions to service suppliers and staff.
Since last year, several have sought new ways of making up the shortfall, introducing taxes on plastic shopping bags, gambling and tourist stays, or fines for skateboarding, letting off fireworks or drinking or offering massages on the street.
The strategy looks to be paying off, with revenues for the 17 regions, including metropolitan Madrid, up 25 percent last year at 168 billion euros as direct and indirect taxes rose.
Their income is forecast to grow through 2016 - also good news for the federal government, which spent 70 billion euros in 2012 and 2013 bailing out regional authorities and town halls.
Local governments heaped up debt during the property boom, when they enjoyed buoyant investment and high tax revenues as construction companies scrambled to build across the country.
"There was a tax that worked very well for many years and gave town halls a lot of money and that was the construction tax... That's where there's a hole," said Javier Suarez, a tax professor at the University of Oviedo. Continued...