Madeira Legislative Assembly asks Portuguese Government for fair funding for municipalities

The Legislative Assembly of the Autonomous Region of Madeira approved, in a plenary session on July 10, Resolution No. 28/2026/M, which formally recommends that the Portuguese Government adopt specific measures for the Autonomous Regions in the revision of the Local Finance Law.

The document underlines that Madeiran municipalities face structural constraints such as insularity, the double insularity of Porto Santo, territorial fragmentation, and ultra-peripherality, which generate additional costs in the exercise of their functions. The resolution criticizes the fact that the increase in powers transferred to municipalities has not been accompanied by corresponding financial means, creating imbalances.

To correct this situation, the Legislative Assembly recommends that the Portuguese Government, in revising the law, enshrine the following points:

1. Clear definition of the powers of each municipal body and guarantee of coherent state funding.
2. Creation of specific mechanisms to compensate for insularity for the municipalities of the Autonomous Regions.
3. Introduction of criteria to increase state transfers that reflect the structural additional costs of insularity.
4. Predictability and stability of transfers, through multi-annual mechanisms.
5. Creation of conditions for direct and simplified access to European funds by the municipalities of the Autonomous Regions.
6. Strengthening the administrative and technical capacity of municipalities.
7. Establishment of mechanisms that ensure municipalities have access to complementary sources of funding.
8. Definition of a regime that allows recourse to borrowing for financing local public investment.
9. Provision of mechanisms that allow parishes to resort to borrowing for investment financing.
10. Non-use of regional own revenues as a mechanism to compensate for state responsibilities.

The resolution argues that equality of opportunity between territories requires differentiated treatment when starting conditions are structurally unequal, a principle recognized by European law for outermost regions.