According to KS, there is a crisis in Kommune-Norge. Mayors despair over demanding finances and plan big cuts.
This afternoon, the municipal organization has been called to a crisis meeting with municipal minister Erling Sande (Sp) to discuss the financial situation.
– The municipalities must receive “emergency aid“, and we must discuss the fundamental challenges. The pressure on the services must be solved with long-term measures, says KS leader Gunn Marit Helgesen to NTB before the meeting.
She says KS is happy about the invitation from Sande. But:
– We have the impression that the government is beginning to understand the seriousness. Understanding is good, but it must end in concrete measures.
The municipalities are 10 billion in the red
In next year’s budget, the government increases transfers to the municipalities by NOK 6.8 billion. It is far from enough, Helgesen asserts.
– The government has referred to the budget as a historic investment, but the reality is that the money will be far from sufficient, she says.
Helgesen points out that the municipalities have already spent NOK 10 billion more than they have this year, in addition to falling tax revenues and increased interest costs.
The government has already signaled that there will be more money in the new balance of this year’s budget in December, but has not said how much it will be.
It creates uncertainty, point out the finance councils in Oslo, Bergen and Trondheim, Hallstein Bjercke (V), Jacob Mæhle (H) and Kjetil Reinskou (H) in a joint statement. When the municipalities do not know how much money they have to deal with, it is difficult for them to plan, they believe.
Takes from the rich and gives to the poor
The government has also introduced a new income system for the municipalities, where they take from the richest and give to the poorest.
Oslo, Bærum and Asker are among the municipalities that lose the most from this redistribution. “Historical” says Oslo city council leader Eirik Lae Solberg (H) about the crisis meeting on Friday.
– I can’t remember that a government already the day after they presented a budget, realizes that it is so bad that they invite a crisis meeting with themselves and the municipalities, he says to NTB.
Lae Solberg says it is important for Oslo to keep more of its own tax revenue.
– Now we lose another 600 million in addition to the 8 billion we are already giving up. We have made this clear.
– Extensive cutbacks
Bærum mayor Lisbeth Hammer Krog (H) has previously spoken very critically about the government’s new income system. She believes the meeting with Sande is important.
– The dramatic situation that far too many municipalities now find themselves in, with extensive cutbacks, the minister must take to heart, she says.
She is asking for a longer transitional arrangement for the “loser” municipalities. Asker mayor Lene Conradi (H) wants the same.
– I still believe that a government and a parliamentary majority that protects a dysfunctional municipal and county structure should lift low-income municipalities with fresh funds without hitting a few as brutally as we see the result today, she says.
The municipal minister: Busy listening
Municipal and District Minister Erling Sande (Sp) understands that the financial situation is demanding for many municipalities and county councils.
– This is due, among other things, to increased costs and the fact that the tax revenue is likely to be lower in 2024 than we thought when the year started. Many municipalities are struggling with their finances and have to make tough priorities going forward. I understand that is difficult, writes Sande to NTB.
The local government minister says he is keen to listen to the municipalities, and that the government is working on the challenge in the municipal economy.
– As announced, I will also return to the Storting with a proposal for increased allocation to the municipal sector for 2024, he says.
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“Kommune-Norge on the Brink: Municipalities in Crisis as Finances Continue to Dwindle”
A crisis is brewing in Kommune-Norge, with mayors expressing desperation over the dire financial situation facing municipalities across the country. This afternoon, a crisis meeting was called by municipal minister Erling Sande to discuss the financial woes plaguing municipalities, a clear indication that the government is finally taking notice of the crisis.
At the center of the crisis is a staggering deficit of 10 billion kroner, a gap that is only expected to widen in the coming years. Despite promises of increased funding from the government, municipal leaders are warning that the proposed investment of 6.8 billion kroner in next year’s budget will fall woefully short of addressing the crisis.
KS leader Gunn Marit Helgesen minced no words, stating that the government’s proposal was inadequate and that concrete measures were needed to address the fundamental challenges facing municipalities. Her warnings are echoed by finance councils in major cities like Oslo, Bergen, and Trondheim, who are decrying the uncertainty caused by the government’s inability to provide clear funding commitments.
Furthermore, a new income system introduced by the government, aimed at redistributing wealth from richer municipalities to poorer ones, has left cities like Oslo, Bærum, and Asker reeling. This policy has been met with alarm by municipal leaders, who warn that it will only exacerbate the existing financial strain.
In Oslo, city council leader Eirik Lae Solberg described the crisis meeting as “historic,” citing the unprecedented speed at which the government has convened a crisis meeting with municipalities to address the financial crisis.
As the crisis deepens, municipal leaders are calling for a comprehensive overhaul of the funding system, including emergency aid to support struggling municipalities. It remains to be seen whether the government’s efforts will be enough to stem the tide of financial woe threatening Kommune-Norge.
What’s next?
The upcoming budget balance in December will be a critical test of the government’s commitment to addressing the crisis. Will they provide sufficient funding to alleviate the financial pressure on municipalities, or will they miss the mark once again?
One thing is certain – the municipalities of Kommune-Norge are at a critical juncture, and the government’s actions in the coming weeks will determine whether they emerge from this crisis stronger and more resilient or continue down a path of financial instability.
