Taxes, state grants, subsidies… Municipalities have several sources of funding to provide public services and carry out their projects. The 2024 Martinique Municipalities Observatory, published by the French Development Agency (AFD), provides insight into the distribution of these resources based on financial data from 2023.
From maintaining public facilities to operating schools, providing street lighting, and carrying out new development projects, municipalities must meet a wide range of needs. To fund these initiatives, their budgets distinguish between operating expenses and capital expenditures intended to develop or modernize infrastructure. But where do their resources come from, and how are they used?
Revenue derived primarily from taxation
Taxes and fees are the primary source of funding for municipal operations. According to the AFD’s 2024 Observatory, they accounted for 76 % of the operating revenues of the 34 municipalities in 2023.
For every 100 euros collected, the breakdown was as follows:
- 76 euros came from taxes and fees;
- 16 euros in state grants;
- 5 euros from the grants received;
- 3 euros from other sources.
Among municipal revenue sources, the dock dues play a significant role. This tax accounts for nearly half of municipal tax revenue. Along with local taxes and state subsidies, it thus contributes to the financing of municipal services.
In total, operating revenue amounted to 1,768 euros per capita in 2023.
Expenses for everyday services
Municipal funds are used primarily to ensure the smooth operation of public services. In particular, they cover employee salaries, the purchase of supplies, energy costs, and equipment maintenance.
According to data presented by the AFD, out of every 100 euros in operating expenses in 2023, 64 euros were allocated to personnel costs, 32 euros to purchases and external expenses, and 4 euros to other expenses.
These expenditures are used, in particular, to cover the maintenance of municipal buildings, street lighting, the operation of school facilities, and social and cultural activities under the jurisdiction of the municipalities.
However, they account for a significant portion of local budgets. In 2023, operating expenses totaled 1,614 euros per capita.
Savings: A Tool for Financing Infrastructure
In addition to day-to-day expenses, municipalities must also allocate resources to build, renovate, or modernize their facilities.
To this end, they can rely, in particular, on their gross savings, which correspond to the difference between their revenue and their operating expenses. This ability to self-finance is one way to fund investments without systematically resorting to borrowing.
In 2023, municipalities’ gross savings totaled 154 euros per capita, while their capital expenditures amounted to 326 euros per capita.
However, savings are not their only source of funding. Local governments can also secure capital grants, allocations, and loans to carry out their projects.
These investments include, in particular, the construction of schools, the renovation of public buildings, infrastructure improvements, and the development of community spaces.
In its report, the AFD notes that, despite the improvement in municipal finances observed in 2023, the level of investment remained relatively low given the available resources. Funding for public infrastructure is therefore a key challenge in meeting residents’ needs and supporting the region’s long-term development.
Financial Data for Fiscal Year 2023: AFD, Martinique Municipalities Observatory 2024
