Canton looks to being in the black in 2020

The cantonal government has announced it is expecting a deficit of CHF 29.5 million for next year but able to be in the black a year later.

Current figures for 2019 show an income of CHF 1.47 billion with expenditure of CHF 1.52 billion, hence the CHF 29.5 million deficit. “However, from 2020 onwards, we expect to be in the black again,” said Heinz Tännler, the cantonal director of finance. However, in order to achieve this, the “2019 Finances” cost-cutting project has to be implemented, meaning savings of CHF 90.5 million.

It was further explained that a two per cent proposed increase in the tax threshold, i.e. from 84 to 86 per cent over the years 2020 to 2022, would bring in an additional CHF 64 million.

What is also expected to have a beneficial influence on the canton’s finances is the expected growth in population and continuing booming economy.

Furthermore, possible implementation of state tax reforms could also lead to the canton benefiting from a one-off CHF 50 million, this as a result of the canton profiting from a 21 per cent share from direct federal tax as opposed to just 17 per cent as at present.

As Tännler further explained, the situation with the canton’s income is now stabilising, though only as result of dipping into a reserve fund is the canton expected be able to break even this year.

What will have deleterious effect on the 2019 budget is the canton’s CHF 329.4 million contribution to the National Equalisation Fund, which could increase to as much as CHF 394 million by 2022. However, should a new system of working out how much contributing cantons pay, and how much benefiting cantons receive, then the canton could benefit from a reduction in its contribution the tune of CHF 64 million.

What must not be forgotten, either, are increasing costs in relation to education, health and social affairs.

As to major outgoings in 2019, these amount to CHF 95 million and include the costs of the new Zug-Baar tangent road improvements on the Kantonalstrasse and various IT projects for the cantonal administration offices, with outgoings for 2020 expected to amount to CHF 136 million.

On an encouraging front, the canton is expected to increase its level of self-financing from 33.4 per cent, as in 2017, to 62.9 per cent in 2019 and 83.6 per cent in 2021.