Article 119

Municipalities, Provinces, Metropolitan cities and Regions shall have fiscal autonomy with respect to revenue and expenditure, subject to the balanced-budget principle, and contribute to ensuring compliance with the economic and fiscal constraints stemming from European Union law. Municipalities, Provinces, Metropolitan Cities and Regions shall have autonomous resources. They may set and levy their own taxes and revenues, in harmony with the Constitution and according to the principles of coordination of public finance and the tax system. They shall share in the revenues from State taxes attributable to their territories. State legislation shall establish an equalisation fund – with no constraints on allocation – for the benefit of territories having lower per-capita fiscal capacity. Revenues raised from the sources referred to in the previous paragraphs shall enable Municipalities, Provinces, Metropolitan Cities and Regions to fully finance the public functions attributed to them. In order to promote economic development, social cohesion and solidarity, eliminate economic and social imbalances, foster the effective exercise of the rights of the person and pursue goals other than those pertaining to the exercise of their ordinary functions, the State shall allocate supplementary resources and adopt special measures in favour of specific Municipalities, Provinces, Metropolitan Cities and Regions. The Republic recognises the distinctiveness of its islands and shall promote the necessary measures to eliminate the disadvantages associated with insularity. Municipalities, Provinces, Metropolitan Cities and Regions shall be endowed with their own assets, allocated to them pursuant to the general principles laid down in State legislation. They may have recourse to borrowing only as a means of financing investment expenditure, with the concomitant adoption of amortisation plans and subject to the condition that a balanced budget be ensured for all authorities within each Region, considered as an aggregate. State guarantees on loans contracted by such authorities shall not be admissible.