Since the declaration of the state of alarm and up to the end of May, the Balearic government lost 46.8 million euros of tax revenue. This was mainly related to the taxes for property sales (35 million euros lower revenue than anticipated) and inheritance/donations.
Over the first five months of 2019, revenue was 354 million euros. Down to 307 euros between January and May this year, the situation is further complicated by the tourist tax, as 34 million euros were the 2019 settlement that was made at the end of January. Since mid-March, tourist tax revenue has been zero.
Revenue receipts had in fact been increasing before the crisis hit. April and May changed the situation completely, and the regional finance ministry's initial estimate for the year's loss of revenue is around 500 million euros. Much is going to depend on what tourism there is, but the most important tax where the government is concerned - in terms of taxes it levies, as opposed to the state taxes - is the property sales tax.
On the cost side of the equation, it is estimated that total additional government spending this year will be 800 million euros. The government is nevertheless hopeful that the Spanish government's special payments to the regions will compensate for most of the losses. Funds from the European Union will also help. These combined sources will be directed at two areas that are to be given greatest priority in revised budgetary allocations for 2020 - health and social services.
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