City records surplus of almost CHF 37 million

The head of finance in the city, Karl Kobelt, announced last Thursday that the city had managed to achieve a surplus of almost CHF 37 million for the year 2017, even though one of “just” CHF 2.1 million had been forecast. The precise amount of surplus amounts to CHF 36.939,000, almost double the CHF 19.9 million achieved in 2016.

Not that the city of Zug is alone in “swimming in money”, as announced in the Tages-Anzeiger daily newspaper; the city of Zurich achieved a surplus of CHF 152.6 million, even though a deficit of CHF 25 million had been forecast. Even Winterthur, previously referred to as the “Greece of Switzerland”, achieved a surplus of CHF 52.6 million.

Precise figures behind the surplus in Zug show that this high figure was achieved after CHF 293,074 flowed into the city’s coffers, with CHF 256,136 flowing out; as Kobelt explained, this was due in no small way to an increase to the tune of CHF 22.7 million in income from taxes, especially from individuals, and this in turn was a result of wealthy individuals moving to the city. Let it not be forgotten that the city’s population rose to more than 30,000 last September. Then, the policy of “saving and doing without” led to a reduction in outgoings, too.

While the income from individuals has risen by CHF 31.4 million since 2014, what is interesting is that income from corporations has fallen and Kobelt put this down to the fact that there were no large sites available for companies (to expand) anymore, many of them moving out to Baar, for example. (Regular readers will not need reminding this municipality recorded a surplus of CHF19.5 million for 2017.) However, Kobelt felt that, with the “technology cluster” at the V-Zug complex and the freeing-up of a former Landis+Gyr site, this could change.

With reserves of CHF 119 million, residents could look to a fall in the tax threshold to 54% from 2019, though it is up to the greater city council to decide on this.

The additional income from taxes is expected to go in part on various school projects as well as on sports facilities in the Herti district.

What surprised Harry Ziegler (photograph), the editor the Zuger Zeitung, about all these cities and towns achieving unexpectedly high surpluses, was how the supposed financial experts got their forecasts so wrong, as he expressed in an editorial last Saturday.   

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