No help pending for minus municipalities

If you spend more money than you earn over time, you are in for trouble. If, on top of this, you have high debts and rising interest rates, it can look pitch black.

This is the case for the majority of the municipalities in Møre and Romsdal.

Kutt will force his way forward. And cuts mean less for health and care, primary and secondary schools, while maintenance and investments in school buildings and roads are put on hold.

Hope for help from the state is slim.

Things went from bad to worse for many of the municipalities in Møre and Romsdal last year. Figures from Statistics Norway show that 20 of them had a weaker operating result than the previous year. A total of 13 of them were in the red. Only seven managed the “requirement” from KS to have a net operating profit of over 1.75 per cent.

These figures are more than calculation exercises for nerds on municipal finance.

These are figures that indicate municipalities that may be on the way to getting into trouble. Some of them already have it. When the coffers are empty, debts are high and operations are in the red, the race is on for painful cuts in services to residents. And the interest rate shock has not yet taken full effect for debt-laden municipalities.

Admits that the budget was unrealistic – asks for a new cut list

In a week’s time, the government will present two important documents for the municipalities: Revised budget and the municipal proposal. It will be a long time between the treats, apart from an expected compensation for an expensive wage settlement. The armed forces, hospitals and police must be prioritized.

Someone has to be a loser. We all know that traffic can be a pain.

The municipalities will be next on the list. For municipalities that have lived beyond their means, it will be very serious.

Asking for an explanation about the property tax

There is a lot of tension in the team. Municipalities such as Aukra, power municipalities and several large aquaculture municipalities are rolling in money. Overall, the municipal sector is not in crisis either. For several years, the municipalities have benefited from good tax growth, which has given solid growth in discretionary income.

The reserves on the “buffer account” have grown – overall.

“Overall” still means little to municipalities that struggle. For municipalities that have “scrabble cash”, it is, on the contrary, bad news that the sector as a whole has 100 billion on its books. It only means that the government will be less eager to bail out those who have done bad things.

A long-announced crisis

Poor Moskenes municipality in Nordland threatened earlier this year to declare itself bankrupt. No other municipality in the country has such a poor operating result as this tiny island municipality. But several municipalities in Møre and Romsdal are also stomping in the mud. Hareid, Tingvoll, Herøy and Ørsta are all among the 30 with the worst operating results.

Hareid, together with Herøy, also ended last year with zero disposal funds, and is together with Ulstein at the top of the country in terms of debt ratio.

It looks extra dark here.