1. Wales Governance Centre, Cardiff University, Cardiff Business School and the Centre for Federalism Studies, Turin SPECIAL ONE DAY CONFERENCE Financing Devolved Government: The Principles and Practicalities of Reform The Pierhead, Cardiff 21 January 2011

2. Italy: Fiscal Federalism in the context of the Italian Constitutional Reform Prof. Paola Bilancia

4. Territorial Autonomy 14 Regions 4 special autonomy Regions 2 special autonomy Provinces 110 Provinces 8100 Municipalities

5. A. Territorial Autonomies- TheConstitutional Reform (2001) a)Decentralization or polycentric system rather than a real federalism b) The Constitution establishes different kinds of autonomy for the Regions c) Italian Republic is composed by Municipalities, Provinces, Metropolitan Cities, Regions and State

6. 3.Distribution of powers State Exclusive Legislative competence: International and EU Relations, Immigration, Defence, Banking, Security, Citizenship, Justice, Antitrust, Foreign Policy, Social Security, Environment, setting standards for actions pertaining to civil and welfare rights, Cultural heritage care.Concurrent (Shared) legislative competences State- Regions Regions international and with EU relations, International Commerce, Job safety, Education, Scientific and Technological Research, Healthcare, Communications, Transport networks, Cultural heritage care. The State law fixes the limits in those areas (principles to be implemented by Regional Legislation). Exclusive (or rather, residual) legislative competences of the Regions Areas not listed in the exclusive State competences or in the concurrent ones ( i.e. Commerce or Tourism.)

7. More autonomy The history of Italian Regions and their increasing value in the constitutional system is strictly connected with the demands of more legislative and financial autonomy with regard to the State

8. a)According to the Constitutional Reform (2001): Fiscal Federalism. Municipalities, Provinces, Regions should have financial autonomy, both on the income side (that is they can have their own taxation) and on the spending side (free to decide how to invest such revenues). They should concur to decide composition and quantity of revenues as well as their use. They should dispose of financial resources adequate to the wealth of their respective areas.. Financial resources

9. Fiscal Federalism. State has to fix principles of coordination of public finance Regions have a share on revenues derived from State taxation on their territory. No more general transfer of financial resources from the State to Regions A Public Equalization Fund to avoid that differences of regional wealth produce dangerous difference in the management of services - Such a Fund should be used to fill the gap between less developed Regions and rich ones.

10. Most regional mandates arent funded (or not properly funded): Regions can effectively exercise their competences only on Healthcare (an area which absorbs about 70% of their financial resources) and in Local Transport. Other services are generally poorly funded. Regional economic success is strictly related to the possibility of controlling financial resources

11. The Implementation of the Constitutional Reform Law of delegation / Gov. Decrees Law n.42 may 2009: principles and criteria to be implemented, time ofr implementation, Parliament advice concerning Government decrees Till now: 3 Decrees enforced Requested time to complete and to enact the Reform:first step 2014-2016; second step 2016-2019

12. Reform The implementation of this reform is crucial for current politics The reform is coeherent with the principles of a federalm system ( mostly,a multilevel system of government) (Technical) Difficulties for its enforcement

13. Reform:Principles and Criteria Equal repartition of resources ensuring each tier of government the resources for its fundamental tasks A real accountability of the public administrators (regional, local)- The Equalization by a National Fund (to avoid differences between territories with less fiscal individual ability and the others)

14. Reform-criteria Regions: -proper taxation -participation to the individual income tax (national tax) -local VAT revenue sharing (VAT linked to the territories) -revenues from the Equalization Fund ( if the Regions are in difficulties) No more general tranfers from the State to the Regions (or Provinces or Municipalities)

15. Procedures Definition of Standard level of services Definition of the Standard costs of services on the basis of the best practices. By Benchmarking- most efficient administrations A complex system of data collection- information (concerning the services)-evaluation of the performances A system of Conferences between State.Regions-local governements to mediate the different stances

16. The fiscal federalism based on standard costs 16 Accountability Guarantees for essential expenses Autonomy Equalization Standards costs Standard public expenditures Standards costs Standard public expenditures A pillar of the fiscal federalism Transparency Incentives and Sanctions