This financial imbalance, affecting both autonomous communities and city councils, stems from the failure to update tax revenue estimates for IRPF and VAT. Advance payments are monthly transfers that the Ministry of Finance is obliged to make, and their update depends on the General State Budgets (PGE).

The absence of PGE since 2023 and parliamentary weakness maintain a discrepancy between the amount that should correspond to administrations and what they actually receive. This situation is particularly critical for regions like the Comunitat Valenciana, which has already demanded its update.

The FEMP (Spanish Federation of Municipalities and Provinces) has again requested a meeting with the Minister of Finance to address this issue. The non-inclusion of the advance payment update in the recently approved new royal decree-law, which did include other measures, has caused concern.

With no new budgets, the system operates under the budgetary extension of 2023. This means the monthly amount transferred is the same as three years ago, despite the current inflation and economic growth. This problem is not new and has been ongoing in previous years, with updates and arrears paid in later months.

The collapse of the decrees that allowed updated payments has forced the Treasury back to square one. Without a new law-ranking norm to support it, the Ministry is obliged to transfer the extended amounts from the 2023 budget. For València City Council, this means receiving 10.8 million euros less per month, while for the Generalitat Valenciana, the shortfall amounts to 163.5 million euros monthly.