The municipality of Westerveld will have financial shortages from next year. The municipality will therefore, she writes, ‘have to look at other scenarios to arrive at a balanced budget, such as increasing municipal taxes or cutting certain budgets.’
The deficits start in 2027 with approximately 1.3 million euros in the budget, but will increase to 1.7 million euros in 2030. This does not yet include the expected personnel costs due to the upcoming collective labor agreement increase and other indexations. In practice, it will therefore involve even more money.
“Here is an alderman who is sharply on the ball, but who is certainly not panicking,” says finance alderman Jacob Boonstra (CDA). “But tough choices have to be made. We cannot hand in the budget like this.”
The setbacks are largely caused by the so-called ‘ravine year’. Municipalities use this term for the moment when the municipalities receive less money from the government, even though the work remains the same.
“The government grant is the largest source of income for municipalities, so you are directly affected by that,” Boonstra explains. “And that contribution has not been maintained for a few years.” Municipalities such as Westerveld are therefore unable to carry out many tasks as they would like.
In addition, the costs in the social domain are increasing twice as fast. On the one hand because the costs of healthcare are rising, on the other hand because more people are using it. “The demand for care is increasing,” says Boonstra. “That is part of the demographic trend of an aging municipality. Westerveld is not unique in this, but it does play a role.”
In addition to the ravine year, the municipality of Westerveld must also allocate more than seven thousand euros extra in the coming years for joint schemes such as Safety Region Drenthe, SamenDrenthe (formerly GGD Drenthe) and Omgevingsdienst Drenthe. Boonstra: “That is a significant cost item compared to other years.”
An additional budget of 250,000 euros will also have to be made available to implement the planned policy for, for example, drawing up the Vledder and Darp village visions, housing construction tasks, educational housing and the management of social real estate in the villages.
Finally, smaller items are also increasing. For example, the security of the town hall has increased by 20,000 euros because costs have risen and the municipality has entered into a new contract with an accountant for a structural 60,000 euros more per year.
To solve the shortages, the municipality has two options; reduce costs through budget cuts or increase revenues by raising taxes. The municipal council will have to make a choice about this on June 30.
Boonstra is already taking a shot ahead and proposes in the framework memorandum to cut two-thirds of the amount and to get one-third from increasing taxes by, for example, turning the knob on the property tax or commuter tax.
But he does not yet have any concrete cutback options. “Of course we are looking at where there is room, but it is not as if we have a list ready.”
Coalition formation can also play a role. Discussions are currently ongoing between DSW/Gemeentebelangen, VVD and CDA about a new coalition. “What is relevant is whether there will soon be wishes in the coalition agreement that will have a large financial bill,” says Boonstra. “Because it is not the case that there is money ready on the shelf.”