The 2025 budget proposal of the city of Äänekoski was completed with a deficit of EUR 2,2 million
The state share system inoculates Äänekoski badly
The mayor's proposal for next year's 2025 budget will be discussed in the city council on November 25.11.2024, 2,2. The budget proposal has a deficit of EUR 7,6 million. Taking into account the accumulated surpluses of 0,6 million euros from previous years and the projected surplus of XNUMX million euros for the current year, the city of Äänekoski will survive the difficult years to come.
- The budget deficit is not a surprise to us, because the general economic recession and the effects of the Russian war of aggression are now also visible here, especially in the export industry. Even though the economic situation is weak now and in the very near future, the vitality of the city of Äänekoski is not waning in the long term and the residents' services remain high-quality. We have a strong industry and new investments are planned, so the future does not look bleak, mayor Matti Tuononen says.
The weak result is significantly affected by the permanent state contribution cut of 1,6 million euros (90 euros/inhabitant) due to the social security reform, which is transferred as part of the municipality's per-inhabitant self-financing share. The reform of the state contribution system has been moved forward by one year to 2027. In the reform, one of the changes highlighted is the removal of social security transfer installments from the new state contribution model: the social security installments do not meet the goals of the government program that the state contribution system be reformed to reflect the current tasks and conditions of the municipalities. In addition, according to preliminary distributions, the city's corporate tax revenue would decrease by 1,8 million euros in 2025. The final distribution will be confirmed at the beginning of next year. Another risk is that municipal tax revenue may fall short of forecasts as unemployment worsens.
- The state share cuts are now hitting Äänekoski hard. The city's income is falling due to the state share cuts after the social security reform, CFO I met Hämäläinen says.
Next year, a significant TE reform will start and employment will play a big role, when the responsibility for managing employment is transferred from the state to the municipalities. Funding for employment services is already being cut, even though at the same time the municipalities' responsibilities are increasing.
- We are concerned about unemployment, layoffs and the financing of the employment area, Hämäläinen states.
The city of Äänekoski will invest 6,1 million euros in 2025 in residents' services and well-being. The biggest investment in 2025 will be the renovation of the Suolahti swimming hall, the conversion of the Konginkanga school into a kindergarten and the renovation of the museum. The biggest investments on the municipal technical side are the renovation of Likolahdenkatu and the construction of a light traffic lane and the traffic arrangements in the Henttala area. In addition, investments are made in pavement repairs of old streets.
The mayor's budget proposal is largely based on the proposals of the boards. The tax percentages for 2025 were decided by the city council on November 11.11.2024, 9,4, and there were no changes to the income tax and property tax percentages. Äänekoski's income tax rate is 2024 and it was last increased for the year XNUMX.
The city council will discuss the final budget at its meeting on December 9.12.2024, XNUMX.
Key indicators of the budget presentation:
- Operating expenses are 78,0 million euros and operating income is 24,1 million euros. The operating margin is EUR -53,9 million.
- The budget for 2025 has a deficit of 2,2 million euros.
- The surplus accumulation in the city's balance sheet is estimated to be 2024 million euros at the end of 8,1, which provides a buffer for the phasing of the economic adjustment for the years 2025 and 2026.
- The income tax rate is 9,4%, which is the same as in 2024.
- Property tax rates will remain at the current level.
- Net investments total 6,1 million euros.
- Borrow a total of 68,1 million euros at the end of 2025 (3 euros/inhabitant).
For more information:
City manager Matti Tuononen, 040 572 3239, matti.tuononen@aanekoski.fi
CFO Tapani Hämäläinen, 0400 115 256, tapani.hamalainen@aanekoski.fi
News published, modified 26.11.2024 at 09:18