Zurich Canton Finances Report a Small Loss After Years of Profits: What Comes Next?

– The flood of money in the canton of Zurich is over

After eight years with profits of up to 750 million francs per year, the canton of Zurich is again making a loss. Albeit a very small one.

Published: March 15, 2024, 2:00 p.m. Updated 10 hours ago

For the first time in his role as finance director, Ernst Stocker has to report negative financial statements.

Photo: Jonathan Labusch

Here you will find additional external content. If you agree that cookies are set by external providers and personal data is thereby transmitted to external providers, you can allow all cookies and display external content directly.

Allow cookiesMore information

Nothing, not even the expensive corona pandemic, could throw Zurich’s finances out of balance. And that’s how it stays. However, Ernst Stocker (SVP) had to announce a deficit on Friday for the first time in his time as finance director since 2015.

But this is minimal. It amounts to 2 million francs, with a budget of almost 19 billion. A precision landing is what they call it. The finances have actually improved significantly compared to the budget. A minus of 353 million was planned for 2023.

Here you will find additional external content. If you agree that cookies are set by external providers and personal data is thereby transmitted to external providers, you can allow all cookies and display external content directly.

Allow cookiesMore information

In the interim report from last August, Stocker even assumed a deficit of 470 million. Head of financial administration Basilius Scheidegger attributed the fact that the result has since improved by almost half a billion to a media orientation to high tax supplements (especially from 2020 and 2021) as well as to improvements from the seven cantonal directorates, which had initially expected cautiously .

National Bank millions are missing

In view of the red zero in the calculation, Stocker summed up: “We got away with a black eye.” The fact that the improvement between budget and financial statements was not as strong as in previous years is due, among other things, to the lack of special effects. For example, the National Bank did not pay out a cent last year.

The fact that the canton ended up in the red is not due to a drying up of tax revenues, on the contrary. Due to the booming economy, the canton took in around 640 million more than planned. In total there were almost 9 billion. ZKB also contributed to the improved result with a 51 million higher dividend. In addition, the canton had to provide fewer additional AHV/IV benefits than budgeted and pay fewer hospital costs for patients.

Hospitals cost more

However, the canton had to pay more than planned to the loss-making hospitals. The University Hospital of Zurich received 47 million, the Cantonal Hospital of Winterthur 23 million. The canton also had to use 130 million more than budgeted to reduce health insurance premiums. Together with the federal funds, 1.1 billion flowed to those entitled to benefits.

The canton had to set aside an additional 73 million because, following a court ruling, it subsequently had to pay the municipalities more towards the costs of the children’s and youth homes. In total, this amount has now risen to almost 440 million.

Stocker is very concerned about two topics. On the one hand, there is the shift in burden from the municipalities to the canton. Due to referendums, the canton pays much more for supplementary benefits for people in need and for the maintenance of municipal roads. That’s almost 300 million – “recurring every year,” as Stocker emphasized. The amount corresponds to 4 tax percent.

Debt is rising again

On the other hand, the finance director is worried about the debt. This has increased again for the first time since 2015, by around 360 million to over 4.2 billion. This is a reversal of the trend after Stocker was able to reduce net debt from almost 5.5 billion to less than 4 billion since he took over as director.

The 360 ​​million were needed for investments, but for the first time in eight years the canton can no longer pay for them entirely from its own resources. The so-called self-financing level halved from a very good 132 percent in the previous year to a mediocre 65 percent. “That is no longer satisfactory,” commented Stocker.

Investment brakes

The canton invested a total of 1.2 billion, primarily in education and health institutions. Stocker now wants to slow things down a bit. To ensure that debts do not continue to rise, he has initiated a prioritization of future investments. We will find out in June what will be built and what will not.

When it comes to net debt per capita, Zurich ranks in the second half of the table in Switzerland, which Stocker worries about. After all, he receives preferential interest rates for new loans from banks due to the canton’s AAA rating. And: The canton has equity capital of an impressive 11.8 billion.

Greater budget accuracy

The finance director hinted at it: At least budget accuracy has improved. The difference between the estimate and the conclusion this year was 351 million.

Here you will find additional external content. If you agree that cookies are set by external providers and personal data is thereby transmitted to external providers, you can allow all cookies and display external content directly.

Allow cookiesMore information

Previously, there were major differences between the respective budgets and the canton’s bills. In each of the previous two years, the canton had miscalculated by over 1 billion.

The right wants to slow down, the left wants to invest

The reactions to the latest figures were varied. The SVP believes the canton is “financially on thin ice,” as it writes. Like the FDP, which even writes of impending “financial difficulties”, it now wants to slow down spending growth and investments.

For the GLP, the days of high state revenues are over, which is why administrative growth should be limited to population growth. The party wants to invest in the compatibility of work and family and in the energy transition.

The SP and the Greens see “the tax cuts of the last few years” as the reason for the poor result. That’s why they want to fight against the planned reduction in company taxes. Neither the SP nor the Greens want to save on investments – especially those for climate protection.

The EPP writes of a “pleasingly good result”, but like the left-wing parties sees “no scope for further tax cuts”.

Good results in recent yearsPascal Unternährer is an editor in the Zurich Politics & Economics department. He mainly reports on political issues from the city and the canton of Zurich. More info@pu20000

Found an error? Report now.

15 comments

2024-03-15 20:28:09
#Ernst #Stocker #presents #bill #flood #money #canton #Zurich