Helsinki invests in new residential areas, education and public transport.

”The budget proposal enables basic services at the current level to the people of Helsinki. The municipal tax will not be raised. The investments will be used to ensure the construction of new residential areas and a working public transport system”, says Mayor Jussi Pajunen of his 2015 budget proposal, presented to the media in the beginning of October.

The Mayor’s 2015 budget proposal has been made in accordance with the conditions of the City Council’s strategy programme.

The essential challenge of the City lies in the change of the general economic environment and the uncertainty of the economic situation. The general view of the City’s economy is fundamentally affected by the incorporation of Helsinki Energia and the Port of Helsinki from the beginning of 2015.

The municipal tax rate of Helsinki remains at 18.5 per cent. According to the budget proposal, the net loan stock of Helsinki will grow by 280 million euros in 2015, with the Helsinki City Transport (HKL) municipal enterprise included in the figure.

The population is expected to grow by 9,000 persons both this year and the next year. The population of Helsinki was 612,664 b the end of 2013.

Scarce growth in tax revenues

In 2015, the overall tax revenues of the City are estimated at 3,013.5 million euros. The tax revenues and state subsidies are expected to grow by 2.2 per cent.

The municipal tax is expected to bring in 2,486 million euros or 52 per cent of the revenues, the corporation tax 308 million euros or 6 per cent of the revenues and real estate tax 219 million euros or 5 per cent of the revenues. The state subsidies allocated to Helsinki are expected to amount to 244 million euros or 5 per cent of the revenues.

The sales target for fixed assets is 100 million euros per year. Moreover, the sales target for buildings and shares is 35 million euros.

Expenditure growth limits agreed for the Council period

The City’s operating expenses in the budget proposal are 4,686.9 million euros in total. The growth of the operating expenses is in accordance with the productivity target of the strategy programme.

The calculations show that 47 percent, or 2,188.0 million euros of the City’s expenditure is used for services provided by the Department of Social Services and Health Care, special health care and social assistance. The Education Deparment’s share of the expenditure is 14 per cent or 666 million euros. The share of the Department of Early Education and Care is 8 per cent, or 380 million euros, and it covers day care for children, preschool education and morning and afternoon activites for school children.

The building and environment administration is responsible for an increasingly concentrated urban structure, the pubic environment and for keeping the city in shape, for which it is allocated 617.1 million euros or 13 per cent of the operating expenses. The city planning and real estate administration has a 7 per cent share, or 326.2 million euros, of the operating expenses.

The second year of the ten-year investment programme

In the budget proposal, the annual level set for the ten-year investment programme is 447 million euros and, as such, in accordance with the strategy programme. The investments including the investments of the municipal enterprises amount to 611.2 million euros. The investments of Helsinki City Transport (HKL) increase to 161.1 million euros.

The biggest investment projects during 2015–2017 are the pre-construction works and the streets and parks in Kalasatama, Pasila, Länsisatama and Kruunuvuorenranta. Other big investment objects include the rebuilding and alteration works of the Helsinki Vocational College’s premises in Roihuvuori and on Teollisuuskatu. The city prepares to participate in the Helsinki Central Library project with a 50 per cent share of the expenses.

In 2015, a total of 181 million euros has been reserved for house building investments. The sum consists of more than 36 million euros for rebuilding and additional development and in excess of 145 million euros for restoration projects.

The budget proposal is submitted to the City Board and finally to the City Council in November.

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