Can an appeal for reconsideration be lodged against a final approval of the city council's budget?

Article 171.1 of the revised text of the Ley Reguladora de las Haciendas Locales, approved by the Real Decreto Legislativo 2/2004, of 5 March (hereinafter, RDL 2/2004), establishes the following:

"The final adoption of the budget may be appealed against directly in the form and within the time limits laid down by the rules of that jurisdiction".

Thus, with this provision, there is no doubt that the final approval of the budget exhausts administrative channels. However, when the Law says "may", does this mean that "only" an administrative appeal can be lodged?

In order to clarify this question, which the RDL itself does not answer, we must first analyse the legal nature of a budgetary approval.

In this respect, a budget approval and even, by extension, a simple amendment to the budget, given the normative content they contain and the drafting procedure they must follow before their final approval, undoubtedly constitute a general provision.

The problem with these general provisions is that, by default, there is no administrative appeal against them, as indicated in Article 112.3 of Law 39/2015, of 1 October, on the Common Administrative Procedure of Public Administrations (hereinafter, Law 39/2015):

"Article 112. Object and classes.

3. No administrative appeal shall lie against administrative provisions of a general nature".

For this reason, it can only be concluded that only a contentious-administrative appeal can be lodged against the final approval of the city council budget or an amendment thereto.

In fact, this same conclusion was reached by the recent Supreme Court Judgement of 29 September 2022, Rec. 6376/2021 (Rapporteur: Mr. José Luís Requero Ibáñez), in which it expressly declared that the municipal decision of the León City Council to reject the appeal for reconsideration presented by an interested party against the definitive approval of the budget was "fully in accordance with the law and article 171 of RDL 2/2004":

"SECOND - QUESTION OF APPEAL AND ARGUMENTS OF THE PARTIES

1. The question of appeal is set out in the Fourth Precedent of Fact of this judgment: whether the final approval of the city council budget can be appealed against by means of an appeal for reconsideration or whether it is only appropriate to appeal directly through contentious-administrative channels.

2. The City Council of León maintains that article 171 of the TRLRHL and article 113.1 of the LRBRL exempt the general system for challenging administrative acts, so that the challenge of budgets has its own system. Thus, the term "may" means that only a direct appeal to the courts is possible, which is supported by Article 14.2 of the TRLHL. It adds that another interpretation would render the adverb "directly" contained in those precepts meaningless when they provide that direct recourse may be had to judicial review. Furthermore, Article 211 of the ROF is contrary to these legal provisions, and is therefore inapplicable. He adds the citation of decisions of this Court in which the city council budgets have been attributed the nature of general provisions.

(...)

2. With regard to the question of the interest of appeal, its resolution depends above all on resolving the legal nature of the city council budget, which is what underlies the lawsuit and conditions it, since before considering whether article 113.1 of the LRBRL or article 171 of the TRLHL provide for an optional appeal for reconsideration, it is necessary to consider, for the purposes of the prohibitive rule of article 112.3 of Law 39/2015, whether the city council budgets should be directly attacked through the courts or whether an appeal for reconsideration can be lodged.

3. In this respect, it is the case law of this Chamber that the city council budget has a regulatory nature: This was understood, for example, in the judgement of the former Seventh Section of 28 February 1996 (appeal 4688) and we have recalled it more recently in the judgement of this Chamber and Section of 22 June 2015, (appeal 3008/2013); a normative nature that is not enervated by its marked specialities either because of the procedure for drawing it up or because it may be tied to a question of confidence, because of its temporality or because it constitutes, in essence, a forecast of income and expenditure.

4. Specialities aside, it is the content of the city council budget that points to this predominantly normative nature. This can be deduced from the regulation of the content of the bases of execution (cfr. article 165.1. second paragraph of the TRLHL), since the budget and its forecasts require the adaptation of pre-existing regulations in order to execute it, a regulation that is specified in article 9.2 of Royal Decree 500/1990, of 20 April, which develops in this point the first law on Local Treasuries, Law 39/1988, of 28 December. And this conclusion is supported by the fact that the explanatory memorandum of this law alludes to the approximation of the city council budget to State budgetary discipline, and therefore participates in its regulatory nature.

5. Consequently, and based on the power conferred on this Chamber by Article 93.1 LJCA to interpret those rules that are applicable other than those expressly identified in the order of admission, we conclude that due to this regulatory nature and for the purposes of its challenge, Article 112.3 of Law 39/2015 is applicable, which provides that "against administrative provisions of a general nature there shall be no appeal in administrative proceedings", which is why the appeal for reconsideration cannot be lodged, and must be challenged directly in the courts".

This same reasoning has also been ratified on previous occasions by various High Courts of Justice in Spain. For example, the Judgment of the High Court of Justice of Castilla y León of Burgos of 2 May 2011, Rec. 412/2009 (Rapporteur: Luis Miguel Blanco Domínguez) already indicated the following:

"It is true that the aforementioned regulation does not specify the inappropriateness of the prior administrative appeal, and uses the expression "may", but, such a regime must be put in relation to the aforementioned article 107 of Law 30/1992, which is a general regulation applicable to local entities, which expressly excludes the appeal for reconsideration against general provisions".

Therefore, it is clear from the above argumentation and previous judicial pronouncements that the expression "may" does not refer to the interested party's authorisation to choose between the contentious appeal or the appeal for reconsideration, but rather to the "authorisation to lodge a contentious-administrative appeal only".