The issue of autonomous financing remains a critical challenge within Spain's decentralized governance system. From the perspective of the Valencian Community, the call for reforming a glaringly unjust and dysfunctional system is not just another demand; it's a structural necessity that influences the very essence of constitutionally enshrined self-government. What was once a united front now appears more like a disbanding.

It's crucial to remember that the 1978 Constitution does not predetermine a single model for autonomous financing. While it sets forth principles like solidarity, financial sufficiency, and equity, it allows significant flexibility for legislators to shape the system through laws like the LOFCA. This openness enables a profound and ambitious reform without altering the constitutional text, reinforcing the feasibility of a negotiated solution.

Historically, major reforms in the financing model have not emerged from structural and consensual reflection but from specific political circumstances when governance was at risk. During such times, certain communities with greater leverage—particularly Catalonia—have pushed for advantageous reforms that later became generalized, but these may now create imbalances for the whole.

Indeed, the unique financial proposal currently being considered for Catalonia attempted statutory protection in 2007, but an "interpretative" ruling by the Constitutional Court blocked it.

The current proposal, clearly incompatible with the principle of equal rights among Spaniards, has faced substantial criticism within the Senate's Commission for Autonomous Communities, via a report questioning key aspects of the proposal, which revives past arguments without considering the threat they pose to the system's internal cohesion and viability. "Where does the notion that Spain couldn't support another fiscal agreement stand?"

Parallel to this debate, the Valencian Community has put forth much more reasonable proposals, grounded in the principles of equity and the need to ensure fair financing, especially for a region burdened by the adverse effects of the current system. The Consell even approved a document outlining elements for a potential federalizing constitutional reform, though without a finalized proposal. Characterized by solutions such as pooling the debt, wholly or partially, particularly that resulting from its historical underfunding.

It's notable that many of these propositions have either been postponed or have yielded to Catalonia's current demand for financial uniqueness, under the false pretense of compatibility.

The most recent data supports the Valencian claim: public spending per capita in the Community is among the lowest in the country. In 2024, it was only 3,020.08 euros per resident, well below the average for the common regime (3,399.78 euros) and even further from Catalonia (3,822.42 euros) or the Basque Country (6,614.40 euros). This gap is unsustainable in the medium and long term.

Unlike in Catalonia—where the issue is with spending rather than income—the Valencian Community faces a clear structural underfunding. The demand is not for privileged treatment as with the Catalan case but for the right to access the necessary resources to provide basic public services on equal footing. This is currently under severe stress, as for the first time in 12 years, the Generalitat Valenciana has not received the extraordinary Autonomous Liquidity Fund (FLA) from the Spanish government.

There is also an intentional conflation of the state's low investment in some regions with an autonomous financing issue. It is essential to separate these debates: financing affects the Generalitat's resources to exercise its competencies; state investment pertains to Spain's government decisions on infrastructure and territorial development, which shouldn't influence statutory clauses—like the Valencian one from 2019—incorporated in various regions. In this regard, comparison over the last decade also indicates an injustice towards Valencians, though its resolution should be pursued through different avenues than the financing system. For context, 2019 was the year we came closest to the investment corresponding to our territorial weight, after decades of being overlooked and continuing to be so.

The reform of the financing system must be tackled with consensus and determination. The Valencian Parliament has listened to numerous experts who agree that the situation is unsustainable and requires structural solutions. These could involve a significant reform of the LOFCA or even leveraging the opportunities for extrastatutory competence expansion enabled by the constitutional framework.

The key is for the new financing to ensure sufficiency, equity, and fiscal co-responsibility, and to end the current asymmetries that systematically penalize regions like Valencia. The Valencian Community isn't asking for privileges or exceptional treatment. It demands what any neutral observer would consider reasonable: fair financing.

The absence of State General Budgets and the refusal to agree on a leveling fund to compensate underfunded regions until the system is reformed diminishes the prospects of alleviating the difficult situation of Valencia's public finances. It should be remembered that state investiture was linked to progress in autonomous financing, not with a unilateral vision but a community one, where all demands are addressed.

Thus, it is evident that the reform of autonomous financing is neither a desire nor a political aspiration: it is an urgent and pressing necessity. Without sufficient resources, self-governance ceases to be an effective reality and becomes a mere illusion. This is incompatible with the decentralizing model enshrined in the Constitution.

Mariano Vivancos, Professor of Constitutional Law at the University of Valencia