Draft budget 2021: services maintained and political priorities implemented despite a considerable deficit

Accompanied by serious economic and social repercussions, the health crisis and the fiscal reform (RFFA) have weighed heavily in the preparation of the draft budget 2021. The expected fall in tax revenue has had a significant negative impact on the overall result, which is reflected in the deficit of 49.3 million francs. In order to implement a proactive policy aimed at supporting the local economy, the Administrative Council has increased the annual investments budget to 180 million francs.

Set against a difficult economic and social backdrop marked by major tax uncertainties, the draft budget 2021 forecasts costs totalling 1.2 billion francs and a final deficit of 49.3 million francs. This deficit is, on the one hand, linked to the expected fall in tax revenue resulting from the introduction of the tax and OASI funding reform (RFFA) in January 2020 and, on the other, to the COVID-19 health crisis.

Despite these exceptional circumstances, the draft budget complies with the maximum authorised deficit, i.e. 49.39 million francs, accepted for the City of Geneva on a transitional basis during the RFFA derogation period by the law on municipal administration (LAC, art. 131, paragraph 2). In this way, the City of Geneva keeps its costs under control and is not required to present a budgetary re-balancing plan to the State Council. 

Falling revenue and rising costs 

The tax revenue currently forecast by the cantonal tax administration accounts for 63.8% of the City of Geneva’s revenue. An increase of 17.4 million is expected from the taxation of natural persons while a reduction of 27.3 million is scheduled from taxation of legal entities. Municipal business tax will fall by 4.0 million francs. Staff-related costs have been contained (+ 3.8 million). Some 23.5 FTE posts, representing an increase of 0.7%, have been created, essentially by means of internal reallocations. Costs linked to amortizations have increased by 1.8 million.

In light of the situation, the Administrative Council (AC) has decided to propose suspending the wage mechanisms for municipal staff and early childhood institutions so as not to exceed the deficit authorised within the RFFA framework. This measure does not for all that involve the implementation of wage reductions.

Budget control and proactive investment policy 

In light of the health crisis, with its serious economic and social repercussions, the public sector has a decisive role to play. By maintaining all public services, the AC has decided to assume its proactive policy to the full. Furthermore, the executive body intends to increase the target investment budget from 130 to 180 million francs. The aim of this is to implement the ecological transition process and meet the infrastructure needs and legal obligations while fostering job creation in local firms. From 2021 onwards, these provisional investments will be spread between financial assets, in order to accelerate the renovation of municipal rental properties, and administrative assets and infrastructures (schools, museums, sports facilities, mobility, and redevelopments).

The level of self-financing of the investments is 36.4%. Alfonso Gomez, Administrative Councillor responsible for Finances, stresses that “in an unprecedented economic, social and health situation, the Administrative Council has shouldered its responsibilities. With this draft budget, it is re-asserting its desire to implement an anti-cyclical financial policy conducive to ecological transition and local job creation, while maintaining public services and complying with the legal provisions.”

Clear political priorities

2021 will mark a turning point in terms of climate commitments. A municipal climate strategy is currently being developed with the aim of reducing CO2 emissions by 60% by 2030. With this in mind, some 500 trees will be planted next year.

Three positions devoted to tree maintenance will be created in the Parks and Gardens Service (SEVE). Thanks to internal reallocations, the Fire and Rescue Service (SIS) will benefit from ten new posts of firefighter with a view to finalising the first step of the operational concept 2015-2030.

Additional resources will also be allocated to the street cleaning service in order to reinforce cleaning operations. More resources will also be allocated to soft mobility and the quality of life in the different districts through appropriate redevelopment programmes.

In order to satisfy demand (+2.1 million), the City’s contribution to the Groupement intercommunal pour l’animation parascolaire (GIAP) will increase considerably. A pilot “night mediators” project will be implemented in order to ease tensions within the districts, re-establish social ties and focus on prevention.

Furthermore, the development of the Discovery Workshops and Mobile Workshops during extracurricular periods will facilitate access to culture and sport. Depending on the evolution of the health crisis and its consequences, needs relating to the social emergency will be re-assessed during the October arbitrage process.

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Article modifié le 24.09.2020 à 15:06