Municipalities and municipal associations received almost 900 million capital gains from the sale of assets last year, it turns out Union of Municipalities of advance information.
The biggest sales profits accrued from land and water areas, buildings and shares and shares. For example, many municipalities were eager to sell their social security properties.
The result of the fiscal year of municipalities and municipal associations weakened slightly compared to the previous two years, but still remained at a strong level. The result rose to 1.3 billion euros due to good tax income and exceptional items.
Subsidiaries still not taken into account
However, according to the municipal association, the result of the financial year alone cannot be used as a measure of the balance of the municipal finances.
“The year 2022 will have a lot of one-off factors that improve the result. Municipalities’ sales profits were exceptionally large. A big concern is caused by the strong increase in expenses, says the CEO of the Municipal Corporation Minna Karhunen in the bulletin.
In 2022, the last year of the old municipalities, the expenses of the municipal economy grew rapidly: five percent. The cost development is likely to increase even more than preliminary estimates, because the figures do not yet include all the billings of social security and municipal corporations. Corona still caused costs last year, but the municipalities received compensation for them.
Preliminary information is partly incomplete and does not give an overall picture of the municipalities’ situation. The figures do not include municipalities’ subsidiaries, which, especially in large municipalities, are of great importance in the overall financial picture of municipal groups. Municipalities have, among other things, energy companies.
The financial statements show rapid economic growth and a stronger-than-expected employment development that accelerated the year. These were reflected in the municipalities’ finances as increased tax revenues. Income from community tax increased by no less than seven percent last year, municipal tax by five percent, and real estate tax by more than six percent.
“The financial differentiation of the municipal field accelerated last year. The result for the fiscal year was negative in approximately 90 municipalities. Annual margins remained almost unchanged in cities with more than 100,000 inhabitants, but weakened in smaller municipalities. The financial result was guaranteed in Southern Finland, while in Eastern Finland the results weakened, states the Deputy CEO of the Municipal Association Timo Queen.
The loan portfolio of municipalities and municipal corporations increased by 230 million euros and was a good 24 billion euros. The general rise in interest rates is not yet reflected in the municipalities’ interest expenses due to the municipalities’ high degree of hedging.