The French government presented its preliminary 2027 budget orientations to local authorities on September 30 at the Hôtel de Roquelaure, outlining a collective fiscal effort of 5,5 Md€ from local governments. The presentation was led by Françoise Gatel, Minister of Territorial Development and Decentralization, alongside David Amiel, Minister for Public Action and Accounts, during a meeting of the Local Finance Committee (CFL).
New Contribution Replaces Prior Local Tax Mechanism
The 2027 finance bill introduces a progressive contribution from local authorities known as the CPEB, designed to yield 2,5 Md€. According to government details presented at the CFL, this mechanism replaces the DILICO system, following recommendations from a parliamentary mission on local finances that began in May 2026. The CPEB applies to 40% of communes, all metropolitan EPCIs, and 60% of départements, while regions are excluded due to separate contribution frameworks.
The contribution scale ranges from 0% to 2% based on a resource and charge index specific to each tier of local government. A higher rate of 3% applies strictly to the top 2% of communes with resources well above average. Government figures indicate that the top 10% of wealthiest communes account for 69% of the total CPEB yield from communes, while the top 10% of EPCIs generate 50% of the intermunicipal yield.
State Spending Freezes and Local Revenue Adjustments
To balance the national fiscal effort, the State is capping ministerial budgets—excluding defense—at 2026 nominal levels, while Social Security is restricting the growth of national health expenditure targets (Ondam) to 2%. Despite the 5,5 Md€ contribution demanded from local authorities, the government projects that local revenues will increase by +5 Md€ in 2027 compared to the previous year, accounting for the sector’s varied composition.
Industrial communes and EPCIs, which faced heavy contributions in 2026, are protected under the 2027 framework through the preservation of adjustment variables for the communal bloc. Financial support for vulnerable administrations is set to rise, with the Global Operating Grant (DGF) increasing by €150 million. Urban solidarity (DSU) and rural solidarity (DSR) grants will grow by €150 million and €140 million respectively.
Targeted Investments and Departmental Funding
Départements will receive a designated fraction of the general social contribution (CSG) amounting to €300 million to fund the personalized autonomy allowance (APA), tying eldercare expenditures to a dynamic revenue source. The State and local fire and rescue services (SDIS) will also establish 150 M€ in capacity pacts to support infrastructure investments.
Local investment funds are undergoing restructuring. The VAT transfer fund (FCTVA) is refocusing on ecological transition and territorial planning projects to generate 2,1 Md€ in savings, maintaining the current rate while lowering the flat rate for other expenditures by five points. Concurrently, the local investment support grant (DSIL) rises by 200 M€ in commitment authorizations to reach 420 M€, and the Green Fund reaches 1 Md€, half dedicated to climate adaptation.
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