An explanation for the increase lies with a buoyant Balearic economy. People in the Balearics paid more by way of tax thanks to economic growth. Income tax revenue made up the bulk of the increase - 616 million more to 2.1 billion. A state tax rather than a regional tax (such as inheritance tax), the Balearic Government does have some margin to adjust rates. In principle, income tax all goes to the state, but the revenue is distributed to the regions under the financing system.
This system goes some way to explaining the 616 million. For 2022, the lingering impact of the pandemic led Madrid to make a low estimate of what the Balearics would receive from that year's revenue. As things turned out, and largely thanks to tourism, the regional economy performed far better than had been expected. 2024 therefore includes the final settlement in respect of 2022.
The other main gains were IVA (VAT), also a state tax, which rose by 63 million to 1.86 billion, and so-called special taxes, essentially excise duties and environmental taxes. These were up by 130 million to 474 million.
There was a loss of 59 million euros of inheritance tax in 2024, but the government also gained from the property transfer tax. In 2023 this fell by almost 200 million because of a slowdown in the market caused by the rise in interest rates. In 2024 there was a slight recovery - up 20 million to 657 million. Another specific regional tax, the tourist tax, registered an increase of 4.6 million to 143 million.
The government believes that the 2024 results confirm its view that reducing certain taxes brings about an increase in others because people have more money and that this stimulates consumption. Vice-president and finance minister Antoni Costa maintains that if economic activity is given a boost, taxes can be lowered and social spending can be increased.
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Credit where credit is due. No one can complain about headlines like this one. The fight of course is about where they spend it.