Finances City of Bern continues to budget in the red and high investments
Bern's municipal council is expecting a deficit of 28 million francs in the coming year. The reasons for this include record-high investments of almost 192 million francs, as can be seen in the 2025 budget presented on Monday.
24.06.2024, 09:34
24.06.2024, 13:16
SDA
"Investment is the issue", said outgoing Finance Director Michael Aebersold (SP) to the media. After the city already invested a record 160 million last year, he held out the prospect of further major projects for 2025 - particularly for schools and sports infrastructure. For example, CHF 18 million has been budgeted for the construction of the new Goumoëns elementary school alone.
Due to the lack of self-financing potential, additional debt of around CHF 85 million is expected in the task and finance plan (AFP). Finance Director Aebersold legitimized the investment plans in particular with the high approval of the electorate.
Population growth means additional expenditure
In addition, there is additional expenditure for a growing city, which is largely related to the rising number of pupils. In addition to investments in infrastructure, the city expects to create almost 40 additional full-time positions for the education authority, for example. Aebersold also listed an expansion of services in the areas of digitalization and climate measures.
Further additional expenditure compared to the current year is due to the cantonal financial and equalization of burdens, for example, to which the City of Bern will have to contribute an additional CHF 14 million in 2025.
The budget does not include the costs for a possible staging of the Eurovision Song Contest next year, as Aebersold explained. If it does take place, the costs are likely to be less than CHF 7 million. "I assume that Zurich and Basel could offer more financially," said Aebersold.
Tax rate remains unchanged
On the revenue side, tax revenue is expected to increase by CHF 42.5 million compared to the current year's budget. The City of Bern is expecting around 350 additional taxable natural persons per year until 2028. The tax revenue from legal entities is like a "rollercoaster ride", as Moritz Jäggi, Head of Tax Administration, explained. However, additional revenue is also expected in this respect in 2025.
The tax rate is to remain unchanged at 1.54 units, said Jäggi. This means that the city of Bern will continue to be one of the most tax-efficient fifth of Bern's municipalities.
Debt will increase until 2031
The City of Bern has always presented a deficit budget in recent years. This has been followed by a small surplus in each of the last three years, which was due to additional tax revenue, for example.
The municipal council also expects the budget to be in the red in the double-digit million range in the planning years 2026 to 2028. According to the AFP, investments and therefore also debt are likely to continue to rise until 2031, explained Reto Rutschi, Head of Finance. At the request of the finance commission, the municipal council has re-examined the prioritization of investments, but politically there is hardly any leeway.
