Rhône Department Council: Budget Relief After Years of Financial Strain

Rhône Department Navigates Financial Challenges, Adopts Austerity Measures

Departmental councilors in the Rhône region likely would have been dismayed had they foreseen the budgetary discussions they faced in 2026. However, a sense of relief prevailed during the departmental council meeting on February 6th, as a path forward emerged after three challenging years marked by collapsing revenues and rising expenditures.

The Rhône Department is grappling with a significant financial downturn, stemming from a decrease in property transaction taxes (DMTO) and a freeze on Value Added Tax (VAT) revenue, coupled with increasing operational costs, particularly in social policies. According to reports, the situation has prompted the adoption of 120 cost-saving measures and a reduction in aid to municipalities.

“We are doing everything possible to keep our raft afloat,” stated Patrice Verchère, the rapporteur general of the budget, during the council meeting on April 4th, 2025. The metaphor of a “raft of the Medusa” was used to illustrate the precarious financial state of the department.

The decline in DMTO revenue is a major factor in the department’s financial woes. Expected revenue from notary fees is projected to be €76 million, a substantial drop from €117 million in 2022 and €123 million in 2021. This decrease, combined with the VAT freeze, has created a significant budgetary constraint.

The department’s budget for 2025 reflects this challenging environment, with a fragile balance maintained despite the pressures. The overall budget has been revised downwards to €608 million, a decrease of over €8 million (-1.33%) from the €616.2 million allocated in 2024. Real operating revenues have also decreased.

Despite the austerity measures, the department is committed to maintaining its investment program, continuing to borrow funds to finance projects. The limit for investment expenditure in 2025 was initially set at €27 million, representing 25% of the 2024 investment budget, excluding debt repayment, which stands at €108 million.

The financial strain is not unique to the Rhône Department. Like many departments across France, the Rhône is facing increased social spending, rising energy costs, and reduced state funding and tax revenues. The department’s president, Christophe Guilloteau, has taken direct responsibility for human resources, scrutinizing every recruitment decision, even for positions with relatively low salaries of around €35,000 per year.

The department has appealed to the state for increased funding, with a vote passed in December calling for a strengthening of state allocations. In a bid to address the financial crisis, the department is also seeking an emergency fund of €30 million.

The energy costs are a significant burden, as the department owns approximately one hundred buildings, including forty colleges. The situation is described as “asphyxiating” due to the combined pressures of rising expenses and declining revenues. The department is actively seeking ways to mitigate these challenges and ensure the continued provision of essential services to its residents.