The General State Budget (''

Spanish Spanish might refer to: * Items from or related to Spain: **Spaniards are a nation and ethnic group indigenous to Spain **Spanish language, spoken in Spain and many countries in the Americas **Spanish cuisine **Spanish history **Spanish culture ...

: Presupuestos Generales del Estado'', PGE) comprises the spending and

revenues In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some companies receive revenue ...

of Spain's central government. The PGE is considered the most important act that a government enacts in a year and determine its policy in most areas, as well as being the basis on which the State's economy will move in that year.

Basic aspects of the State budget

The basic aspects of the PGE are defined by article 134 of the

Spanish Constitution of 1978 The Spanish Constitution () is the supreme law of the Kingdom of Spain. It was enacted after its approval in 1978 in a constitutional referendum; it represents the culmination of the Spanish transition to democracy. The current version was a ...

. The General State Budget are annual, include all the expenses and income of the state public sector and they are the amount of tax benefits that affect state taxes. Spain was a pioneer in terms of transparency in 1978 because of the introduction of this obligation with respect to tax benefits. Since these are equivalent to an indirect subsidy, they can be considered an expense and therefore must be included in the budget.

Preparation and approval

The preparation of the General State Budget is the responsibility of the

Government A government is the system or group of people governing an organized community, generally a State (polity), state. In the case of its broad associative definition, government normally consists of legislature, executive (government), execu ...

, while its examination, amendment and approval is the responsibility of the

Cortes Generales The (; ) are the Bicameralism, bicameral legislative chambers of Spain, consisting of the Congress of Deputies (the lower house) and the Senate of Spain, Senate (the upper house). The Congress of Deputies meets in the Palacio de las Cortes, ...

. The Government must present before the

Congress of Deputies The Congress of Deputies () is the lower house of the , Spain's legislative branch, the upper house being the Senate of Spain, Senate. The Congress meets in the Palacio de las Cortes, Madrid, Palace of the Parliament () in Madrid. Congress has ...

the General State Budget at least three months before the expiration of those of the previous year. The objective is for the budget to be approved before December 31 of each year. If the Budgetary Act is not approved before the first day of the corresponding fiscal year, the Budget of the previous fiscal year are automatically carried over until the approval of the new ones. This extension has some exception: it does not affect credits approved for activities that ended in the year whose budget is extended. In practice, when a government does not get the parliamentary support to approve the budget, the most usual thing is the holding of early elections since it is very difficult to govern and make economic policy decisions with an extended budget.

Spending limit

The spending limit established in the budget is not absolute. Once the General State Budget has been approved, the Government may present bills that imply an increase in

public spending Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual o ...

or a decrease in revenues corresponding to the same budget year. These bills must be approved by parliament. The parliament can also present a proposal or amendment that supposes an increase of the credits (expense) or a decrease of the budgetary income, but this proposal requires the agreement of the Government for its processing.

Creation and modification of taxes

The Budget Act can not create

taxes A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...

. This law can only modify them when a substantive tax law so foresees.

Budget stability

Article 135 of the

Constitution A constitution is the aggregate of fundamental principles or established precedents that constitute the legal basis of a polity, organization or other type of entity, and commonly determines how that entity is to be governed. When these pri ...

, modified in 2011, establishes the principles of stability and budget sustainability. Among them it is established that the credits to pay the public debt are always present in the budget and are of absolute priority. This means that even if the budget does not include a forecast of expenditure in debt payment, if there are debts, the credit for that expense is automatically understood as being included in the budget in a virtual way by this article of the constitution. The principles established in this article are developed in the Organic Law of Budget Stability and Financial Sustainability. The objective of budget stability is presented by the

and is established every three years according to forecasts of

economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...

. Each year a multi-year budget plan for three years must be drawn up in which the stability objective is taken into account.

Budgets of the autonomous communities

The Spanish Constitution says nothing about how the budgets of the

autonomous communities The autonomous communities () are the first-level administrative divisions of Spain, created in accordance with the Spanish Constitution of 1978, with the aim of guaranteeing limited autonomy to the nationalities and regions that make up Spa ...

should be. The approval of autonomous budgets is not subject to any type of supervision by the

General State Administration The General State Administration () is one of the Public Administrations of Spain. It is the only administration with powers throughout the national territory and it is controlled by the central government. It comprises a: * Central Organizatio ...

Budgets of local administrations

Article 142 of the Constitution establishes that

municipalities A municipality is usually a single administrative division having municipal corporation, corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate. The term ''municipality' ...

have financial autonomy. However, local administrations can not approve budgets. They only have the so-called tax ordinances, which do not have the status of law. Local taxes are regulated in the Regulating Act of the Local Treasuries, which establishes a minimum basis and gives the municipalities enough freedom to develop these bases. The basic structure of local budgets, unlike that of regional governments, is established by the Government. Local entities can not present a budget deficit according to article 135 of the constitution.

Management and sanction

The draft budget is prepared annually by the

Ministry of Finance A ministry of finance is a ministry or other government agency in charge of government finance, fiscal policy, and financial regulation. It is headed by a finance minister, an executive or cabinet position . A ministry of finance's portfoli ...

, through the Secretariat of State for Budget and Expenditures. The draft project is approved by the

Council of Ministers Council of Ministers is a traditional name given to the supreme Executive (government), executive organ in some governments. It is usually equivalent to the term Cabinet (government), cabinet. The term Council of State is a similar name that also m ...

. Then, the Government presents them to the

at least three months before the expiration of the fiscal year. The Congress of Deputies votes in the first place for its generic admission or the amendments to the totality, which, if successful, suppose their return to the Government. Once this procedure has been completed, the capacity for alteration due to partial amendments is subject to the non-alteration of the budget balance. Later, the Budget is sent to the

Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...

, which makes a second reading, but whose ability to alter them is very limited, with a final referral to Congress. Subsequently, they are sanctioned by

Monarch A monarch () is a head of stateWebster's II New College Dictionary. "Monarch". Houghton Mifflin. Boston. 2001. p. 707. Life tenure, for life or until abdication, and therefore the head of state of a monarchy. A monarch may exercise the highest ...

and published in the Official State Gazette (BOE) with the rank of an ordinary law. In the event that they are not approved, the extension of the previous year's budget is foreseen. Within the General Budget include those of

Social Security Welfare spending is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifically to social insurance ...

, cultural heritage and other autonomous agencies. The budgets of the

Autonomous Communities The autonomous communities () are the first-level administrative divisions of Spain, created in accordance with the Spanish Constitution of 1978, with the aim of guaranteeing limited autonomy to the nationalities and regions that make up Spa ...

and the

are organized independently, but they have to be subject to a common regulatory framework, for example in the setting of the public deficit. The legislation of the

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...

, its budgets and the exchange of various payments and collections with the different Spanish public administrations, also imply different limitations of the national budget capacity and autonomy of Spain.Law 47/2003, of November 26, General Budgetary.
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References

{{Reflist

External links

Organic Law 1/2016, of Budget Stability and Financial Sustainability (Spanish)

General State Budget - Ministry of the Treasury
Politics of Spain Government budgets