Tampere to Post €56.5m First-Quarter Deficit as Tax Revenues Drop

The local paper Tamperelainen reports the city is poised to record a €56.5 million first-quarter deficit, €11.3 million worse than forecast.

Weakening tax receipts and a sharp rise in unemployment benefit costs are driving the deterioration. Municipal income tax revenue is projected to fall short by €14.0 million. Tampere's unemployment rate was 15.4 percent in April, compared with 12.1 percent nationally, and up 2.3 percentage points from a year earlier. Property tax income is historically weak after a fall in property tax values and limited new construction. Population growth has stalled: the city lost 75 residents in January–April while international immigration added 365. Preliminary Statistics Finland data put Tampere's population at 263,262 at the end of April.

The city's operating margin forecast is €8.2 million better than budget, helped by lower operating costs and one-off sales such as the €1.6 million plot sale in Lapinniemi. Early childhood services have underspent because there are fewer children than planned. New municipal collective labour agreements, however, push personnel costs up by €15.2 million. Chief Financial Officer Mikko Koskela calls the situation challenging but says a balance programme launched last year appears to be working and aims for €18.6 million in savings this year. The city board reviewed the report on Monday, and the city council will receive it next Monday as an extraordinary item so councillors have an updated picture before summer, Koskela added.