Tampere tax rise could cover 46.5 million euro deficit

Nearly 40 percent of Tampere city councillors who responded to a survey by Yle support raising the municipal tax rate, while 43 percent oppose an increase. The city’s 2027 budget framework has a deficit of 46.5 million euros.

Yle asked all 67 members of Tampere City Council whether the tax rate should be raised. Fifty-six councillors responded, with 38 percent supporting an increase and 43 percent opposing one.

Tampere has agreed to balance its finances by 2029 at the latest. The city has identified around 40 million euros in adjustments, but still needs to cover the remaining deficit.

One percentage point of municipal income tax would bring Tampere approximately 60 million euros in additional revenue. The city’s current municipal income tax rate is 7.60 percent.

The budget is being prepared under particularly difficult conditions. A June forecast put this year’s deficit at 60.5 million euros, which is 16.4 million euros more than in the amended budget.

Unemployment is the biggest single burden on the city’s finances. Tampere’s share of unemployment benefit costs is expected to reach 55 million euros this year, or 11 million euros more than budgeted. The forecast for tax revenue is also 13 million euros below the budget.

The city’s investment pressure has been reduced by nearly 60 million euros, from approximately 280 million euros to about 221 million euros annually.

In April, the city executive removed from the budget preparation principles a statement that no tax increases would be proposed for 2027. In June, it approved a budget framework that did not include higher tax rates.

The final decision will be made through the political decision-making process. The mayoral programme states that tax increases should be the last resort for balancing the city’s finances.

Social Democrats divided

The issue divides the councillors from the Social Democratic Party, which leads the city administration. Four of the party’s councillors who responded support a tax increase, while three oppose one.

Pilvi Kuitu, who supports an increase, said moderate rises now would be more responsible than raising the rate substantially or carrying out severe cuts later under pressure.

Antti Asp, who opposes an increase, said municipal income taxes should not be raised, at least in the current situation. He said he would not support tax increases in the near future without strong grounds.

Several Social Democrats took a cautious position and did not answer simply yes or no. Many said there was no need for an increase at present, but that future decisions would depend on developments in the economy and employment.

Johanna Loukaskorpi, chair of the Social Democratic councillors’ group, also said the time for a tax increase was not now. She stressed that the mayoral programme allows increases to be considered as a last resort to safeguard basic services.

Social Democratic councillor Lauri Lyly said he hoped other measures would be sufficient and that tax increases would not be needed. If they were not, he predicted that the issue would be on the agenda in autumn 2027.