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The cantons are currently reporting profits in the millions for 2022. Budgets were once much more pessimistic.
Good news is pouring in from cantonal capital to cantonal capital: profits in the millions. The canton of Aargau recorded an increase of 116 million francs – 42 million were originally budgeted. The discrepancy is even greater in the canton of Lucerne: instead of a minus of 8.5 million, the result was a plus of 204.5 million francs. And in Switzerland’s largest canton – Zurich – they were even wrong by a whole billion francs.
How can that be? And is there a system on the part of the finance departments behind these pessimistic forecasts?
Higher income, lower expenses
During the budget debates last autumn, there was great concern in the cantons about an uncertain future. About thousands of Ukraine refugees who had to be housed or an energy shortage that had to be prepared for. In addition, the aftermath of the corona crisis was still noticeable.
In fact, it turned out very differently. On the one hand, the economy flourished. Fewer unemployed people also meant lower costs for the cantons, for example in social assistance or reduced premiums. In many cantons, tax revenue was also significantly better than forecast. In the canton of St. Gallen, this resulted in 32 percent more income than planned.
Then there were the many billions from the Swiss National Bank (SNB) – around 107 million francs in the canton of Aargau and 124 million in the canton of Zurich. Overall, the SNB paid four billion francs to the cantons after the good 2021 financial year.
Increase spending or reduce taxes?
So how did these predictions come about? Heinz Tännler, government councilor and finance director of the canton of Zug, explains to SRF that their own authority looks two to three years into the past and then uses current forecasts to depict “a realistic scenario” in the budget. You don’t want to fall into “euphoria”.
Legend:
The flow of money bubbled in the cantons last year. The reason is also the payments from the Swiss National Bank, which amounted to four billion Swiss francs.
Swiss National Bank
Lukas Rühli, an economist at the business-related think tank Avenir Suisse, believes that this danger definitely does not exist. “The cantons are clearly budgeting too carefully.” They had already miscalculated in the past, last year by a record-breaking seven billion francs.
Rühli does not place a conscious tactic behind it. Nevertheless, one must ask oneself questions. From the point of view of the administration, the pessimistic forecasts would have various advantages: Claims by the voters or the federal government could be warded off with the argument of the lack of funds.
The pessimistic forecasts are in conflict with intergenerational justice.
And indeed: the high surpluses arouse desires. The middle classes are demanding tax cuts, while those on the left want to see more spending, for example in the form of additional premium reductions or climate protection measures.
But expert Rühli sees the wrong forecasts critical from another point: the fairness between the generations. Many cantons use the surpluses to reduce debt and thus correct “past mistakes”. The economist believes that even those who put money aside are acting unfairly. In this case, too, it would not be the actual donors – the current taxpayers – who would be rewarded, but future generations.
It is uncertain whether the discussion about the pessimistic forecasts will continue. This year there will probably be no money for the cantons from the National Bank. The economic outlook is also unclear in view of high interest rates, ongoing war and trade disputes. Several cantons are therefore anticipating a minus as a precaution.
You can see more about this in the program “Schweiz aktuell” at 7:00 p.m. on SRF 1.