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Poorer municipalities fear reduction in Cantonal Equalisation Fund

Seven municipalities in the canton, namely Cham, Hünenberg, Menzingen, Neuheim, Risch, Steinhausen and Unterägeri, benefit financially from the wealthier municipalities of Baar, Oberägeri, Walchwil and the city of Zug through the Cantonal Equalisation Fund (ZFA). However, this situation could change, causing concern for those municipalities which rely on it.
 
One fact which makes the differences between the individual municipalities clear is that, with a tax threshold of 71%, residents in the municipality of Menzingen pay 16% more in tax than those of Walchwil, where the tax threshold is 55% and it is thought this wide gap will not be narrowed in the near future either.
 
The reason for this is that the richer municipalities are not willing to continue paying large sums to the ZFA, and this could mean the less wealthy municipalities having trouble with their budgets and having to curb their spending or having to raise their tax thresholds even higher.

At present a working group is looking into a possible new solution to the problem. While it is thought unlikely any amendment will be made to the current ZFA, the city of Zug is exerting some pressure to ensure changes are made.
 
The mayor of Menzingen and head of the municipality's finances, Roman Straub (second photograph), said, "You cannot really compare us with the richer municipalities of Baar, Oberägeri, Walchwil and Zug. We have far higher education costs than Walchwil simply because we have more pupils and furthermore we do not have the number of companies other municipalities have to provide extra income. In effect this means we rely on the ZFA for up to two-thirds of our budget." Straub proudly mentioned that debt in the municipality had been reduced to nil but it had been decided to keep the tax threshold at 71%, the highest rate in the canton.
 
Naturally, perspective has to be kept on the issue and Straub readily admitted that, compared with many municipalities beyond the cantonal borders, Menzingen's situation was very good. For his part, the mayor of Walchwil and head of the municipality's finances, Tobias Hürlimann, admired Straub's financial policy but denied that Walchwil could be described as a tax paradise.
 
Hürlimann's financial policy is one of ensuring proper housekeeping with new projects being looked into very carefully before the green light is given. "Whenever something essential is needed, we do it," said Hürlimann "but when it is just a matter of wanting something we could manage without we feel the right thing to do is to wait until we can afford it." As to the tax threshold in Walchwil, Hürlimann said the council tries to avoid great changes. In fact over the course of 7 years the level has been reduced from 58% to its current rate of 55%.
 
This is a different approach from that of the council of the city of Zug, who wanted to increase their tax threshold from 60% to 65% in order to pay for its planned projects. "At the moment," continued Hürlimann, "we can pay for all our projects ourselves but if you consider that in 2013 we in Walchwil will have to pay CHF 25 million into the ZFA, or CHF 6,500 per capita, then things will start to get a bit difficult. The important thing now is to save, which is why we reduced the tax threshold by 1% for 2012."
 
The only municipality in the canton to increase its tax threshold in December 2011 was Hünenberg, from 65% to 68%. The reason for this is to finance the renovation and extension of the Ehret school. A cap of CHF 22.5 million was put on the project but some feel that for this amount a new school could be built.  


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