The finances of the communities and regions

Throughout the successive phases of the Belgian state reform, powers were increasingly devolved from federal level to the communities and regions. The present article deals with the revenues and expenditure of the communities and regions. The article also contains an analysis of the changes in the financing balance and debt level. Finally, the results of the projections regarding the movement in community and regional finances are also highlighted. The analysis concerns both the communities and regions as a whole, and the individual federated entities. In order to eliminate the influence of institutional differences and compare more uniform entities, a distinction is also made between the north and south of the country. The past decade has seen a systematic improvement in the financing balance of the communities and regions. The explanation for this improving trend lies in the fact that the real rate of growth in their primary expenditure was lower than the growth of their revenues. Revenues in fact increased sharply. During the so-called transitional period which ended in 1999, the special mechanisms provided under the Finance Act indeed contributed towards a very steep increase in the funds allocated in respect of personal income tax. As regards the part of personal income tax allocated to the communities and regions, the gradual switch to an allocation formula based on the proceeds of the personal income tax collected in each entity caused the Finance Act funding to rise faster in the north than in the south. Since revenues have grown faster than expenditure over the past ten years in each entity – with expenditure rising by more in the north than in the south of the country – all the communities and regions succeeded in achieving an improvement in their financing balance. In order to achieve the target of a balanced budget in 2010, set by the High Council of Finance, the increase in expenditure for the communities and regions as a whole must not outpace GDP growth. The permissible expenditure growth will probably not be the same for each individual entity. In the north, expenditure can increase by slightly more than in the south, partly because the north has scope for gradually reducing its surplus, while in the south the deficits – albeit small – need to be eliminated.public finance, fiscal devolution, Belgian administrative reform, Finance Act, communities and regions

Structure of public revenues

Leaving aside issues concerning the optimum size of the public sector and the optimum scale of public revenues, an important issue is to determine which is the public revenue structure that is the most favorable to growth. It is important to distribute the burden of fiscal and parafiscal levies as evenly as possible over the various tax bases, to minimise the disincentive to activate the available factors of production, and to coordinate or harmonise the tax system at international level to ensure that, for certain forms of taxation such as the tax on savings, the desirable level of taxation cannot be prejudiced by the risk of relocation. In Belgium, the burden of fiscal and parafiscal levies is relatively concentrated on labour, since – on the basis of the national accounts – the burden on that factor was over 6.8 percentage points higher than the EU average in 2001, while the rates of tax on consumption, corporate profits and capital were much closer to the European average. The difference between Belgium and the EU in terms of the marginal rates of fiscal and parafiscal levies on labour is actually considerably greater than the difference in the average tax burden recorded on the basis of the annual accounts. Part of the reason could be that the scale of tax expenditure is more favourable to taxpayers in Belgium is higher than elsewhere. Since the level of the marginal rates probably plays a key role in economic growth, it is questionable whether this is the ideal structure for the taxation of labour incomes. In 2001, the implicit rate of VAT was 1.4 percentage points above the EU average. Conversely, the implicit rate of the other consumption taxes is below the average. That is due to the level of those taxes on tobacco, alcohol, the purchase of private motor vehicles and mineral oils, particularly heating oil. In Belgium, the reductions in personal income tax and social security contributions already implemented or scheduled have reduced the levies on labour incomes in recent years, and that reduction will continue in the future. Conversely, certain indirect taxes have increased and further rises are planned for the years ahead. Following the entry into force of these measures, the burden of fiscal and parafiscal levies will diminish, and shift slightly towards consumption, correcting to some extent the heavy concentration of this burden on labour. This will bring the structure of taxation closer to that of the EU. Since it was cut in 2003, the nominal rate of tax on corporate profits has been slightly below the EU average in Belgium. The scale of tax expenditure for ordinary companies seems comparable to that observed elsewhere. Moreover, it seems that tax incentives for research and development – vital factors determining the economy’s growth potential – are relatively modest in Belgium.

Biomechanical and biochemical properties of the thoracic aorta in warmblood horses, Friesian horses, and Friesians with aortic rupture

Background: Thoracic aortic rupture and aortopulmonary fistulation are rare conditions in horses. It mainly affects Friesian horses. Intrinsic differences in biomechanical properties of the aortic wall might predispose this breed. The biomechanical and biochemical properties of the thoracic aorta were characterized in warmblood horses, unaffected Friesian horses and Friesians with aortic rupture in an attempt to unravel the underlying pathogenesis of aortic rupture in Friesian horses. Samples of the thoracic aorta at the ligamentum arteriosum (LA), mid thoracic aorta (T1) and distal thoracic aorta (T2) were obtained from Friesian horses with aortic rupture (A), nonaffected Friesian (NA) and warmblood horses (WB). The biomechanical properties of these samples were determined using uniaxial tensile and rupture assays. The percentages of collagen and elastin (mg/mg dry weight) were quantified. Results: Data revealed no significant biomechanical nor biochemical differences among the different groups of horses. The distal thoracic aorta displayed an increased stiffness associated with a higher collagen percentage in this area and a higher load-bearing capacity compared to the more proximal segments. Conclusions: Our findings match reported findings in other animal species. Study results did not provide evidence that the predisposition of the Friesian horse breed for aortic rupture can be attributed to altered biomechanical properties of the aortic wall

Induced osteogenic differentiation of human smooth muscle cells as a model of vascular calcification

Vascular calcification is a severe pathological event in the manifestation of atherosclerosis. Pathogenic triggers mediating osteogenic differentiation of arterial smooth muscle cells (SMC) in humans remain insufficiently understood and are to a large extent investigated in animal models or cells derived thereof. Here, we describe an in vitro model based on SMC derived from healthy and diseased humans that allows to comprehensively investigate vascular calcification mechanisms. Comparing the impact of the commonly used SMC culture media VascuLife, DMEM, and M199, cells were characterised by immunofluorescence, flow cytometry, qPCR, and regarding their contractility and proliferative capacity. Irrespective of the arterial origin, the clinical background and the expansion medium used, all cells expressed typical molecular SMC marker while contractility varied between donors. Interestingly, the ability to induce an osteogenic differentiation strongly depended on the culture medium, with only SMC cultured in DMEM depositing calcified matrix upon osteogenic stimulation, which correlated with increased alkaline phosphatase activity, increased inorganic phosphate level and upregulation of osteogenic gene markers. Our optimized model is suitable for donor-oriented as well as broader screening of potential pathogenic mediators triggering vascular calcification. Translational studies aiming to identify and to evaluate therapeutic targets in a personalized fashion would be feasible

Soft dentin results in unique flexible teeth in scraping catfishes

Teeth are generally used for actions in which they experience mainly compressive forces acting toward the base. The ordered tooth enamel(oid) and dentin structures contribute to the high compressive strength but also to the minor shear and tensile strengths. Some vertebrates, however, use their teeth for scraping, with teeth experiencing forces directed mostly normal to their long axis. Some scraping suckermouth catfishes (Loricariidae) even appear to have flexible teeth, which have not been found in any other vertebrate taxon. Considering the mineralized nature of tooth tissues, the notion of flexible teeth seems paradoxical. We studied teeth of five species, testing and measuring tooth flexibility, and investigating tooth (micro) structure using transmission electron microscopy, staining, computed tomography scanning, and scanning electron microscopy-energy-dispersive spectrometry. We quantified the extreme bending capacity of single teeth (up to 180 degrees) and show that reorganizations of the tooth (micro) structure and extreme hypomineralization of the dentin are adaptations preventing breaking by allowing flexibility. Tooth shape and internal structure appear to be optimized for bending in one direction, which is expected to occur frequently when feeding (scraping) under natural conditions. Not all loricariid catfishes possess flexible teeth, with the trait potentially having evolved more than once. Flexible teeth surely rank among the most extreme evolutionary novelties in known mineralized biological materials and might yield a better understanding of the processes of dentin formation and (hypo) mineralization in vertebrates, including humans