City presents a balanced budget

For the first time in four years, the city of Zug has been able to present a balanced budget for the following year. This has been able to be achieved primarily by a reduction in the contributions it makes to the National (NFA) and Cantonal (ZFA) Equalisation Funds and cutbacks in a number of areas.
 
Over the past few years, around one third of all the city's income from taxes has flowed out into the two aforementioned funds. Furthermore, amendments to fiscal laws have meant that, every year, CHF 25 million less has flowed into the city's accounts, and indeed this will continue until 2017.
 
What has had a significant effect in improving the city's budget for 2015 are the amendments to the ZFA. This means that, after lengthy negotiations, the city will have to pay CHF 9 million a year less to other municipalities in the canton over the next three years. Cutbacks on various projects have also meant a saving of between CHF2-3 million.
 
In precise terms, next year the city should be able to record a surplus of CHF 16,000. As to the near future, the city council looks to a moderate increase in income from taxes from both private individuals and companies with the tax threshold remaining at 60%.
 
Nevertheless, Karl Kobelt (second photograph), the head of finance on the city council, said that pressure on the city's coffers will remain. He pointed out that, while the city would be paying less to the ZFA as a result of a higher contribution from the canton of Zug to the tune of CHF 4.5 million, this would only continue until 2017, meaning that, from 2018 onwards, the wealthier municipalities would have to make up for this loss.
 
Another major challenge facing the city is the ongoing increase in population. This is expected to rise by 1,400 to 29,500 by 2018 and will inevitably lead to higher outgoings, not least an 8.3 % rise in employment relating to administration. Most of this actually involves employing more teaching staff, not least as a result of the student population which is growing by 3% a year. However as from 2016, it is thought fewer administrative staff will be needed (teachers apart) as a number of services, such as waste disposal, are to be outsourced. Then it is hoped to make savings with a more centralised administration once everything is processed on the one site in the former Landis & Gyr building.
 
As to expenditure, the city is looking to have to pay some CHF 30 million a year for the next four years for, among other things, new school buildings and the renovation of the Theater Casino and of a major site in the Old Town.
 
Looking further ahead, a surplus of CHF 250,000 is expected in the 2016 budget. However, a deficit of CHF 383,000 is expected in 2017 and one as as high as CHF 6.6 million in 2018.