News item | 28-05-2026 | 14:38
In a letter to the House of Representatives, the Minister of the Interior and Kingdom Relations and the State Secretary of Finance stated that more research is needed to revise the distribution of resources from the municipal fund. This follows the advice on the redistribution of the ROB and VNG. Furthermore, in accordance with the advice of the ROB, the growth path for the years 2027 and 2028 will be frozen at the current level. The current level of the growth path is indexed. A next step is planned for January 1, 2029.
Equivalent financial starting point
When revising the distribution model of the municipal fund, the focus is on the redistribution of the resources in the fund and not on the size of the fund. The aim of the distribution model of the municipal fund is to give municipalities an equal financial starting position. So that they can realize equivalent facilities at an equal tax burden. This takes into account the costs that municipalities have to incur based on objective characteristics. The various options that municipalities have to generate their own income are also examined.
A new distribution model for the municipal fund has been introduced as of January 1, 2023. Since then, municipalities have been growing in small steps towards the new distribution through the so-called growth path.
Further research for a distribution that better reflects practice
From 2023 onwards, work will be done to further improve the distribution model so that the distribution is better aligned with the practice of municipalities. Further research has been conducted into this in recent years and the fund managers have asked the ROB and VNG for advice. The ROB indicates that the proposals contain valuable ideas, but are not yet good enough to be implemented now. In its advice, the VNG has stated that, in accordance with the advice of the ROB, it will now implement two changes and not the others.
The effect of the proposals, which will be developed in the coming years, on the distribution of resources from the municipal fund may be different in 2029 than the current distribution. There is a real possibility that municipalities would have to make cuts based on the current growth path and still receive additional resources in 2029 or vice versa. Given this uncertainty, the ROB recommends in its advice to freeze the current growth path for the years 2027 and 2028, but to index the amounts of the growth path for the years 2027 and 2028. The fund managers have decided to follow this advice from the ROB.
The two minor changes concern, firstly, calculating with percentages instead of hundreds when it comes to households with a low income. This proposal already leads to a distribution that better reflects the actual situation. In addition, it concerns the adjustment of the calculation rates to the actual average property tax rates. The redistribution of resources in the municipal fund resulting from both adjustments is limited.
Read the letter to parliament about the revision of the distribution of municipal funds here.
