The case

The challenges cities are facing today – population growth, housing shortage, climate change – entail high levels of investment. In addition to this, the Federal Council’s tax relief package is going to put a strain on the budgets of cities, which is the reason why municipalities will have to make important strategic decisions, which, more often than not, involve new taxation, and this is what is generating additional pressure.

The commentary

In September, the Federal Council published a report that envisages significant budget cuts, such as the waiving of federal contributions to daycare centres, a reduction in contributions to universities as well as the waiving of funding for cross-border passenger rail transport. Both the cantons and the cities have responded to these announcements as it is obvious that these cuts entail a shift in the burden. The canton of Neuchâtel estimates the expenditure that will be passed on to cantonal and municipal finances at CHF 40 million. At the same time, various challenges are forcing Swiss cities to invest heavily, be it due to population growth, which requires the expansion of various infrastructures, or climate change, which necessitates extensive adaptations. A  consequence of these demands will be that cities will ^ have to budget for higher expenditure, which forces some of them rethink their tax rates.

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