Municipalities urged to submit unbalanced budgets to show financial problems

The association of Dutch municipalities VNG urged its members to stop doing everything they could to submit a balanced budget. Submit an unbalanced budget to show the national government the vast financial troubles and “exceptional financial situation” they face, the VNG said, NOS reports.

The VNG advised municipalities to submit balanced budgets in 2024 and 2025, in which their income and expenditure are in balance. But in 2026 and 2027, submit a “realistic budget” so that the national government can clearly see that they have too little money to carry out all the tasks they are saddled with.

In the past, the size of the municipal fund - from which municipalities derive a considerable part of their income - moved along with the national government’s expenditure. This year, the fund consisted of almost 40.5 billion euros. But that amount will decrease by billions in the coming years, dropping to 35 billion euros in 2027, according to the Spring Memorandum.

“We cannot perform our duties,” Hester van Buren, Finance Alderman in Amsterdam and member of the finance committee at the VNG told NOS. Municipalities have gotten more and more tasks over the past years, while budgets have gotten smaller and smaller. “We can’t go on like this any longer.”

The VNG was in talks with the national government, but due to Rutte IV Cabinet’s collapse, “it will take even longer, and the uncertainty is even greater,” Van Buren said. “We can not make any structural investments, which has consequences for sustainability and the social domain in particular.”

“In Amsterdam, we have a huge task in terms of sustainability and housing,” Van Buren said as an example. “There is a housing crisis, but there is a lack of money. If you build a neighborhood, you cannot realize social facilities like schools or infrastructure.”