Municipalities headed for billions in cuts

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Municipalities are obliged to make substantial cuts in spending on roads, sports, culture, public parks and street lights for the coming years.The local authorities are faced with a gap of more than 6 billion euros through cuts and the transfer of government tasks. This is the result of calculations by the Centre for Research on Economics of Local Government (COELO), attached to the University of Groningen.

A forecast, based on the now known government policy, leaves municipalities with a yearly deficit of 2.7 billions euros. The cuts on services such as youth care and the AWBZ, which are transferred to municipalities, as of 2014, account for 2.9 billion. The proposed additional cuts from the government make for a another half billion in municipal deficit.

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Where the government can compensate a significant part of the deficit with tax increases, municipalities must mainly limit their spending. Municipalities tax only 3.4 percent of all taxes, so even a doubling of rates is not good enough, according to the Coelo.

The amenities in the different communities will be under pressure, because of all the cuts, state the Research Center. The cuts also cause differences between the municipalities, because they have to deliver customized care for their service area.

That is a direct result of government policy to decentralize care. A majority of by Coelo surveyed households labels this difference as unwanted.

When it comes to savings on street lighting, community centers, and sports facilities, most citizens have sympathy for cuts of municipalities, is further shown by the survey.

Budget cuts in for instance home health care and child welfare however, is rejected by a majority of respondents.

Finally, community investments are also threatening to collapse. A relapse of a third could occur, accounting for fifteen percent of all public investment. Municipalities are now accounted for 45 percent of all public investment.

The Association of Dutch Municipalities (VNG), who commissioned the study, says in a comment that municipalities will be in difficulties by the hefty cuts.

The government has too much control. These cuts put too much pressure on the municipal facilities and they are bad for the economy as well, says VNG chairman Annemarie Jorritsma.