For the first time in years, the province of Groningen will adjust its motor vehicle tax next year. The so-called surcharges will not be increased in the following three years.
In 2024, Groningen will no longer be the leader as the province with the highest surcharges in the country, says deputy Bram Schmaal (finance). He presented the first on Wednesday budget of the new coalition of his own Groninger Belang, BBB, PvdA and ChristenUnie.
The four college partners had already agreed in the college program this spring that the surcharges would not increase further. “In this province, residents are more dependent on the car than elsewhere,” Schmaal explains. “I cannot explain why Groningen is the province with the highest motor vehicle tax.”
Groningen car owners now pay an amount that can range from 103 to almost 400 euros, depending on the weight of their vehicle. This amount is in addition to the motor vehicle tax that the central government levies.
Only source of income
This puts the province in the lead nationally, but according to Schmaal, South Holland will take over that ‘honor’ in 2024 and he expects that even more provinces will pass Groningen. “By the end of this council period we will drop to the middle bracket nationally,” the deputy estimates.
The surcharges are the only source of income for the province, in addition to the compensation from The Hague for the various tasks it performs for the government. That is one of the pillars of the budget, with a total of 535 million in expenditure in 2024.
In the past, the provincial government increased surcharges at least as much as inflation to balance the budget or to create additional financial scope. However, according to Schmaal, this is not necessary.
Still extra income
Because despite the freeze, revenue from motor vehicle tax will continue to increase in the coming years. Especially because the tax exemption for electric cars and campers will disappear from 2025. This will bring Groningen an additional 10 million in revenue until 2027.
The new coalition will make additional investments in the coming years, in particular in the subsidy scheme for the preservation of Groningen heritage (3 million), the quality of life in regional centers (1.5 billion) and Groningen Airport Eelde.
The province is increasing its contribution for maintenance and safety costs at the airport to 5.6 million until 2027. “We want to send a positive signal to Schiphol,” Schmaal explains.
The provinces of Groningen and Drenthe and the municipalities of Assen and Tynaarlo hope that the national airport will join them as a shareholder and include Eelde in the Schiphol Group.
Crucial step
Northern administrators see this as a crucial step towards a profitable future. The conversations about this are going in the right direction, Schmaal hints.
The province’s financial position is ‘not dissatisfied’, says the deputy. Yet he sees risks in the longer term. However, he is less gloomy than many municipal administrators about the ‘raven year’ 2026. Then the government compensation for lower authorities will no longer keep pace with the level of investments that The Hague is making.
However, there are also positive prospects for the provinces. For example, Schmaal expects Groningen to improve through the redistribution of the provincial fund. The Hague is also considering giving the provinces new options for their own taxation. That could also be positive for Groningen, Schmaal estimates.
‘No crunch, no tasks’
However, the deputy repeats his appeal to the government after Budget Day. According to him, the ‘transitions’ that the cabinet requires in the areas of agriculture, rural areas, water management and housing far exceed the financial strength of provinces and municipalities. If The Hague does not contribute money, he anticipates delays. “No problems, no tasks,” Schmaal emphasizes.