Skanderborg seeks aid as child boom strains wealthy municipality

Skanderborg Municipality is seeking 50 million kroner from a government fund for financially troubled municipalities, despite having a relatively wealthy and highly educated population, DR reports. Rapid population growth and a surge in the number of children have put pressure on its finances.

A total of 45 municipalities have applied for the fund, requesting about 2.7 billion kroner. Only 1 billion kroner is available. The municipalities will be told at the end of August whether they will receive funding.

While many applicants are struggling with rising costs for older residents and declining populations, Skanderborg is facing the opposite problem.

“It has financial consequences because, of course, we have to pay for the kindergartens we need to build. That means we already face a financial challenge next year,” said Mayor Frands Fischer of the Social Democrats.

Fischer said Skanderborg has the largest proportion of kindergarten and primary school children of any municipality in the country.

If Skanderborg receives the 50 million kroner, the money will help fund two new kindergartens in Virring and Låsby. Together, the projects are expected to cost about 80 million kroner, according to the mayor.

In its application, Skanderborg describes its population as “relatively well-off, with a high level of education and a low level of public transfer income.” By contrast, Lolland and Langeland municipalities have applied for 333 million kroner and 115 million kroner respectively, citing challenges including large numbers of residents receiving public benefits.

Fischer nevertheless believes Skanderborg qualifies for financial assistance. He said the equalisation system, which transfers money between municipalities to balance differences in tax revenue and spending needs, does not sufficiently account for the cost of children and young people.

“We receive a share of the money corresponding to the number of people in the municipality. The challenge is that we have relatively many children aged zero to six, so the amount we receive does not at all match the money we need to spend,” he said.

Although Skanderborg is experiencing strong growth, Fischer said its liquidity is expected to fall well below the national average next year. Without changes to the budget, he said, the municipality could receive a letter from the state requiring it to address its liquidity.