Labor mayor Robin Kåss in Porsgrunn hires a law firm against his own government to prevent the municipality from losing NOK 180 million following a government proposal.
Kåss was state secretary of then health minister Jonas Gahr Støre until 2013.
Now Støre has become prime minister and mayor of Kås, currently a slightly angry mayor.
– We requested a legal assessment from the law firm Ernst & Young on the legitimacy of the proposal in the state budget to introduce basic interest taxLand rent is a tax levied on companies that make money using natural resources, such as oil extraction, hydroelectricity and agriculture. on hydroelectricity with retroactive forceThis means giving effect to the legal rule for the conditions that are in time before the adoption of the rule, in this case for the whole of 2022. from January 1, 2022, says Kåss.
VG has obtained access to the agreement with the law firm.
There it appears that the hourly rates for the lawyer’s services will range from NOK 1,500 to NOK 2,800.
Kåss says it will be little, against the consequences of the government’s tax package, which he believes will ruin the finances of the municipality.
– In total, the tax increases mean NOK 1.038 million for our municipality, mainly because we are the owners of Skagerak Energi. The savings related to what has to be given retroactive effect amounts to NOK 180 million, he states with frustration and indicates what it means in practice:
– 180 million are the costs of developing a nursing home. In total, we have two billion in our municipality’s annual budget, so it’s so bad that we have to act.
– The piggy bank strategy has failed
– At this time of year, you are in the middle of the budget process for the municipality next year. What consequences will the state budget have for that work?
– It will have a dramatic effect on both operations and investments. It is so bad that we have decided to try parts of this legally. We are doing this together with the municipalities of Bamble and Skien, which are likely to suffer a loss of NOK 233 and 1.064 million respectively.
– It is the result of the fact that the municipalities own Skagerak Energi; that over time has given you great income?
– Yes, we own 14.8 percent in Skagerak Energi, but it is completely wrong that we took large dividends and became rich: instead of taking large dividends, we chose to reinvest the profits back into the company.
Gives the following picture:
– We therefore chose to use Skagerak Energi as a piggy bank, where we deposited our money. But when the state suddenly pursues it, the whole strategy has failed.
He says they are exposed to a double negative effect:
– Instead of taking money out of the piggy bank, we took out a loan. As interest rates rise, we now get a double whammy.
Kåss says the law firm will release a statement to the three municipalities at a joint board meeting on November 2.
– Then we will have a first legal evaluation.
– What could end with you in court against your own government?
– It will probably not be against our government, but against the state, where we will be examined in court whether it is legal to introduce such a tax retroactively. We need to take this step, because it’s about citizens’ money, says the Labor mayor of Porsgrunn.
Hourly wages up to NOK 2,800
Here is the description of the assignment that the law firm has drawn up:
“Evaluate whether the proposal in the state budget for 2023 to introduce the land rent tax on hydroelectric energy with retroactive effect from 01.01.2022 is legal under the constitutional prohibition to give retroactive effect to the laws. We will also evaluate this prohibition in the face of ‘introduction of a high price subsidy for power plants starting from 28 September 2022 “.
The legal department of the Ministry of Justice has assessed the legitimacy of the tax hike on hydropower with retroactive effect.
They go to great lengths to raise doubts about the government’s proposal; the proposal is “near the outer edge of the constitutionSays their interpretation statement.
Vedum: Take note
Finance Minister Trygve Slagsvold Vedum (Sp) responds on behalf of the government on the matter.
– The government notes that the municipality of Porsgrunn, along with Bamble and Skien, will conduct an independent investigation into the legal issues relating to the government’s proposal to increase the rate of land rental tax and the premium contribution, says the finance minister.
He assures that “the government has made an in-depth analysis of the question of retroactivity and of article 97 of the Constitution”.
– This is discussed in the Ministry of Finance tax bill And in a statement of the legal office of the Ministry of Justice of 28 September.
Vedum politically argues that energy producers “make billions from our common natural resources”.
– At a time when companies have made an extraordinary amount of money due to people’s high electricity bills, the Center Party and the AP believe it is fitting that some of this goes back to the community through a powerful electricity subsidy scheme for companies. families.
Three priorities
He says they prioritized:
- To reduce taxes for those earning less than NOK 750,000.
- A strengthening of national preparation.
- And to guarantee retirement to the country’s pensioners.
– In the budget for next year, one of the most important jobs is to create security for people and their daily finances. The best way to do this is to curb price inflation, in which case less money spending on oil is a prerequisite. So the expenses have to be covered in other ways, such as land rent and high-priced subsidies for Norwegian power companies.
Concludes:
– I understand that power companies and their owners are critical of this as we are shifting values from them to the wider community. A debate on measures is part of our democracy.
