Mayor Vartiainen hosted an Economic Evening for city residents on 4 December – recording available on the Helsinki Channel

On 4 December, Mayor Juhana Vartiainen hosted the Mayor’s Economic Evening at the City Hall. A recording of the event is available on the Helsinki channel. 

The topic of the Economic Evening was Helsinki’s budget for next year: what kind of services will be produced for city residents and what kind of investments will be made into the growing city. 

In addition to the Mayor’s speech, Budget Manager Pia Ojavuo presented key excerpts from next year’s budget at the Economic Evening. Next, a discussion was held regarding how city residents see the budget in practice. The discussion’s participants were City Manager Jukka-Pekka Ujula; Executive Director, Education Division Satu Järvenkallas; Executive Director, Urban Environment Division Ville Lehmuskoski; Executive Director, Culture and Leisure Division Juha Ahonen; and Director of Health and Substance Abuse Services Leena Turpeinen, representing the social services, health care and rescue services. 

The Mayor’s Economic Evening on the Helsinki channel(Link leads to external service)

At its meeting on 27 November, the City Council approved the budget for 2025 and the indicative financial plan for 2025–2027.

In the budget for the next year, Helsinki will continue with its policy of responsible financial management, investing particularly in children and young people, key services and the prevention of segregation. 

The investments required for Helsinki to grow will remain at a high level. In 2025, investments in Municipal Helsinki will total EUR 985 million. The starting point of the investment programme is securing the financing for ongoing projects and statutory services. Municipal Helsinki means the City of Helsinki without the Social Services, Health Care and Rescue Services Division, which is funded by the state.

Mayor Juhana Vartiainen invites Helsinki residents to the Mayor's economic evening. The economic evening will be held at the Helsinki City Hall on Wednesday, 4 December at 18:00–19:30. The event can also be viewed live on the Helsinki kanava channel.

The economic evening is a public event resembling the Mayor's resident evenings, and it is intended for all city residents.

– The size of Helsinki and the scope of its economy are exceptional in Finland. The City Council is to approve the 2025 budget on 27 November, and after this, we will hold an event for city residents in which we will inform them what the city budget will mean in practice, and what it will mean for the daily lives of residents. There will be an opportunity to send questions before the event and to ask questions at the event, says Mayor Juhana Vartiainen.

The council decision has been preceded by the joint budget negotiations of the parties included on the City Board, the decision about which the city issued a notice on 31 November.

The programme includes highlights of the budget and answers to questions posed by the city residents

In addition to the Mayor's speech, budget manager Pia Ojavuo will present key excerpts from next year's budget. After this, there will be a discussion about how the city budget will be used, and what the special focus areas will be in 2025. The discussion’s participants will be city manager Jukka-Pekka Ujula, head of the Education Division Satu Järvenkallas, head of the Urban Environment Division Ville Lehmuskoski, head of the Culture and Leisure Division Juha Ahonen, and Director of Health and Substance Abuse Services Leena Turpeinen, representing the social services, health care and rescue services. The discussion will be hosted by Pi Krogell-Magni, head of external communications at the City Executive Office. A time slot has been reserved for questions from the audience after the discussion. 

The economic evening will be held at the Event Square of the City Hall (Pohjoisesplanadi 11–13). The Event square can accommodate about a hundred participants. The event can also be viewed live on the Helsinki kanava channel. The event on the Event Square and the Helsinki kanava broadcast will begin at 18:00.

You can use the KerroKantasi survey to send questions to the organisers in advance(Link leads to external service): what would you like to ask about Helsinki's budget for next year? The survey will close at 23:59 pm on 2 December.

In its meeting on 13 November, the City Council approved the income tax and property tax rates for 2025.

The City Council decided to set the income tax rate at 5.3%. The tax rate will remain the same as in 2024. Municipal tax is estimated to generate over one billion euros.

The reform of the social services, health care and rescue services affected the municipalities' 2023 municipal tax rates. The tax rate for 2023 consisted of the 2022 tax rate, which was cut by 12.64 percentage points in accordance with the legislation. The cut was made at the same rate for all municipalities. After the cut, the municipal tax rate for Helsinki in 2023 was 5.36%. For 2024, municipalities had to report the income tax rate to the tenth of a percentage point, and thus the municipal tax rate for 2024 was decided to be 5.30%.

Property tax rates will also remain unchanged in 2025 compared to 2024. The property tax rates in 2025 are:

• The general property tax rate for ground is 1.30%
• general property tax rate for buildings 0.93%
• tax rate for permanent residences 0.41%
• tax rate for other residential buildings 0.93%
• unbuilt construction site tax rate 4.30%
• tax rate for power plants 3.10%.

Property tax revenue is estimated at 376 million euros.

Mayor Juhana Vartiainen’s proposal for Helsinki’s 2025 budget has been completed after negotiations with the parties included in the City Board. Helsinki will continue with its policy of responsible financial management, investing particularly in children and young people, key services and the prevention of segregation. The city will also continue with its ambitious personnel wage development programme. Next year, resources will also be channelled to areas such as arts and culture grants, winter maintenance of streets and measures to make the city centre more pleasant. 

According to the 2025 budget proposal, Helsinki will continue to invest in the well-being of children and young people. Basic funding for education will be further strengthened, and additional funding totalling EUR 93 million will be allocated to the division in 2025.  Resources will also be directed to needs-based funding and vocational education and training. Furthermore, the textbook appropriation earmarked for printed learning materials will be increased. During the current strategy period, the appropriations for education have been increased by a total of EUR 365 million or some 30%. 

More funds allocated to the Culture and Leisure Division in the 2025 budget are earmarked for activities such as youth work in and outside of schools and the maintenance of the city’s sports facilities. Appropriations for arts and culture, sports and youth activities will also be increased. The appropriations for the division will be EUR 318 million in total, showing an increase of EUR 15 million from the previous year.

The total appropriations of more than EUR 1 billion for the Urban Environment Division in the budget proposal will ensure that Helsinki’s sustainable growth and the building of the urban environment continue in the coming year. The city will also start designing two new attractive themed playgrounds. Other additional resources will also be allocated to the division, including a total of EUR 3 million for winter maintenance activities. In addition, the division will investigate the conditions under which the service tunnel in the city centre could also be used as a thoroughfare. 

EUR 5 million will be allocated to the City Board’s operating expenses to implement the 2025 wage development programme that will promote the city’s personnel retention. The wage development programme is a programme of the City of Helsinki to increase the wages of its employees above the level required by the collective agreements for regular employees and public officials. The employee groups receiving a wage increase will change from year to year. 

Investments supporting Helsinki’s growth will continue, but the health and social services reform will cut the tax base

The investments required for Helsinki to grow will remain at a high level. In 2025, investments in Municipal Helsinki will total EUR 985 million. The starting point of the investment programme is securing the financing for ongoing projects and statutory services. 

Among the largest facility projects starting in 2025 are an extension of the Myllypuro health and well-being centre, the construction of a new building to replace the current Vartiokylä primary school and daycare centre building, and the construction of a multipurpose building in Suutarila. The largest projects involving development of the city structure include pre-construction of the Kalasatama, Länsisatama and Pasila project areas, as well as the Crown Bridges project.

Helsinki’s good financial situation will change in the next few years, because the health and social services reform will strongly cut the city’s tax base. Due to the reform, even good growth in percentage terms will only produce a small increase in tax revenue. This means that Helsinki’s operating surplus will be permanently smaller, leading to less money being available for investments and operating expenses, for example.

Social Services, Health Care and Rescue Services Division to invest in availability of services and increase support to organisations 

Despite legislative amendments, Helsinki’s goal is to offer residents with a non-urgent health issue a doctor’s appointment within 30 days and a nurse’s appointment within 14 days. Helsinki is determined to introduce a team-based model to primary health care, similar to Omalääkärimalli 2.0 (Personal Physician Model 2.0), at all health stations, especially for those who need to use the services often and people with multiple illnesses. No health station fees will be introduced in Helsinki in 2025.

Helsinki will implement a homelessness programme and boost the work done with persons experiencing homelessness with a project included in the scope of the national housing programme. In addition, the city will prevent evictions by measures such as ensuring the availability of housing counselling and by investing in adult social work. Helsinki will also increase support for organisations in the health and social services sector and organisations promoting well-being and health. Support for such organisations will increase by EUR 1.2 million or 20%.

The financing for the Social Services, Health Care and Rescue Services Division consists of non-earmarked funding from the state, client charge income and other operating income. The revenue budgeted for the Social Services, Health Care and Rescue Services Division in the 2025 budget is EUR 249 million and expenditure nearly EUR 3.2 billion. Central government funding received by Helsinki for social services, health care and rescue services in 2025 will total EUR 2.95 billion. 

City Council will decide on the 2025 budget in November

In the budget proposal, the operations of the City of Helsinki are divided into Municipal Helsinki and the Social Services, Health Care and Rescue Services Division.

The City Board will discuss the 2025 budget proposal on Monday, 4 November, and the City Council on 27 November. 

Mayor Vartiainen will invite all city residents to the Mayor’s financial evening at the beginning of December (4 December). The public event will be held at the City Hall and broadcast live on the Helsinki channel at 18:00.

According to the Helsinki City Strategy, responsible finances are the basis for sustainable growth.  Helsinki has managed its finances responsibly, which means that the finances have remained strong and there has been no need for any sudden moves due to the changing market conditions. The effects of the health care, social welfare and rescue services reform on Helsinki’s tax funding are significant and will become visible during the next financial planning period 2025–2027.

Budgeted operating expenses to increase in line with the principle of accountability  

In accordance with the urban strategy, the 2025 budget is based on the principle of accountability regarding the growth in operating expenses, where the increase in operating expenses is linked to changes in the cost level and population growth, as well as the productivity target set in the strategy.  

In the Municipal Helsinki income statement, external operating expenses will increase by 8.1% in 2025 compared to the 2024 budget. The operating expenses will increase because of Helsinki’s new employment management tasks due to the employment services reform and changes in municipalities’ financial responsibility for unemployment security, for which financial compensation will be received in the form of central government transfers to local government. When the effects of the employment services reform and some technical changes made to the budget are eliminated from the increase in operating expenses, the actual increase in operating expenses is 4.1%. The increase is in line with the principle of accountability set in the strategy.

In the 2025 budget, operating expenses have been increased in basic public services in particular, where population growth will most directly affect the costs.

Health care, social welfare and rescue services reform influences Helsinki’s tax funding

Local income tax revenue for 2025 is expected to be EUR 1,080 million, corporation tax revenue EUR 435 million and real estate tax revenue EUR 376 million. The local income tax and real estate tax rates have not been changed from the 2024 level in the 2025 budget.

The changes in central government transfers linked to the health care, social welfare and rescue services reform will continue to have a significant impact on central government transfers to municipalities in 2025. In 2025, Helsinki is expected to receive EUR 297 million in central government transfers.

The annual contribution margin of Municipal Helsinki will decrease to EUR 478 million in 2025, compared to some EUR 550 million in 2024 and clearly higher before that. This is due to the slow increase in tax revenue in 2025 caused by the change in the health care, social welfare and rescue services funding model and the increased operating expenses. The annual contribution margin is expected to decrease from the 2022–2023 level in the 2025–2027 financial planning period.

Investment programme at a record high level

The level of investments for the fiscal year has been set in line with the deficit limit for the operations during the council term and the cash flow from investments. In 2025, the investment expenditure of Municipal Helsinki will total EUR 983 million. In 2023, the actual level of investments was EUR 849 million.

The investment programme is based on securing funding for ongoing projects and statutory services and enabling effective growth investments to support urban development. Investments enable housing and facility development, sustainable urban development and an increase in the attractiveness of the city centre and regional centres. Balanced development of the different areas in the city will be supported by investing in urban renewal, transport links and versatile housing production.

Creating the conditions needed to meet the housing production targets makes up a significant part of the investments. They are outlined in the land use, housing and transport agreement between the state and the municipalities of the Helsinki metropolitan area and the Helsinki housing programme and the related land use programme.

Helsinki will have to make more investments with debt financing

As a result of the decreasing annual contribution margin, the city’s cash flow from operations and investments, which is the best indicator of deficit and surplus in a constantly growing city, will remain negative by around EUR 500 million in the coming years. In the financial plan, the deficit in cash flow from operations and investments is covered primarily by borrowing and partly by the city’s cash assets.  

During the 2025–2027 financial planning period, Helsinki’s pool of loans is estimated to increase by a total of EUR 836 million. If realised, the city’s pool of loans will increase by about 2.5 times from the level at the end of 2023 by 2027. According to the financial plan, the pool of loans will increase to some EUR 2,250 million (EUR 3,195 per resident) by the end of 2027. At the end of 2023, the pool of loans stood at EUR 906 million (EUR 1,342 per resident).

In the budget, the operations of the City of Helsinki are divided into Municipal Helsinki and the Social Services, Health Care and Rescue Services Division, which is funded by central government transfers. The financing for health care, social welfare and rescue services consists of non-earmarked funding from the state, client charge income and other operating income. Municipal Helsinki comprises the Education Division, the Urban Environment Division, the Culture and Leisure Division, the City Executive Office and the unincorporated county enterprises. Budget negotiations will take place in October, after which the Mayor’s budget proposal will be published.