Operating expenses of municipalities in Mainland Finland grew by 3.9 per cent in January to September 2019

In January to September 2019, the external operating expenses of municipalities in Mainland Finland were 3.9 per cent higher than in the corresponding period of the previous year. External operating revenue declined by 3.7 per cent. Municipalities received a total of EUR 17.1 billion in tax revenue and EUR 6.7 billion in central government transfers to local government. The external operating expenses of joint municipal authorities grew by 8.2 per cent and operating revenue by 7.1 per cent. These data appear from Statistics Finland's statistics on quarterly local government finances, for which data were collected from 80 municipalities and from 69 joint municipal authorities in Mainland Finland.

External quarterly data on the finances of municipalities and joint municipal authorities, EUR million ¹⁾

	3rd quarter
	Municipalities		Joint municipal authorities
	2019	Change, %	2019	Change, %
Operating revenue total	5 045	-3,7	12 269	7,1
Operating expenses total	28 395	3,9	11 771	8,2
Annual contribution margin	1 030	-66,1	438	-17,5
Loan stock	18 739	19,1	4 299	13,4

1) Operating expenses include expenses from production for own use. The change is calculated compared with the corresponding period in the previous year.

Finances of municipalities and joint municipal authorities

The external operating expenses of municipalities in Mainland Finland amounted to EUR 28.4 billion in January to September 2019. Compared with the corresponding period of the previous year, the growth was 3.9 per cent. The external operating revenue of municipalities amounted to EUR 5.0 billion. The operating revenue decreased by 3.7 per cent. Certain recording procedures used in the comparison year in part increased the operating revenue and expenses of the comparison year. ¹⁾ The discontinuation of these procedures decreases the operating revenue and expenses in 2019 compared to the previous year. The operating margin weakened by EUR 1.2 billion and totalled EUR -23.2 billion.

Municipalities received EUR 17.1 billion in tax revenue during the first three quarters of 2019, which is 4.7 per cent less than in the corresponding period the previous year. The taxation reforms implemented in 2019 had a reducing effect on tax revenue. Central government transfers to local government grew by 0.6 per cent to EUR 6.7 billion. Tax funding formed of tax revenue and central government transfers to local government was EUR 4,338 per capita, on average, in the municipalities in Mainland Finland. ²⁾ The annual contribution margin weakened by 66.1 per cent from the previous year and was EUR 1.0 billion.

In the period from the beginning of January to the end of September, the investment expenses of municipalities amounted to EUR 2.5 billion, and they grew by 13.8 per cent from the previous year. At the end of the third quarter of 2019, the loan stock of municipalities was EUR 18.7 billion. The loan stock grew by 3.9 per cent from the end of the previous quarter. The loan stock per capita was EUR 3,415, on average. ³⁾

The external operating expenses of joint municipal authorities in Mainland Finland amounted to EUR 11.8 billion in total and the operating revenue to EUR 12.3 billion in January to September 2019. Operating expenses grew by 8.2 per cent and operating revenue by 7.1 per cent compared to the corresponding period of the year before.

During the first nine months of 2019, joint municipal authorities spent altogether EUR 0.8 billion in investment expenses. They increased by 12.4 per cent from the comparison year. At the end of September, the loan stock totalled EUR 4.3 billion and it grew by 1.8 per cent during the quarter.

Information on the statistics

The statistics on quarterly local government finances are in the first to third quarters a sample survey that describes the development of the finances of municipalities and joint municipal authorities in Mainland Finland by quarter. For the statistical release on the fourth quarter, data are collected from all municipalities and joint municipal authorities in Mainland Finland. The data in the statistics on quarterly local government finances are preliminary and they might become revised in coming publications.

No data are released by municipality or joint municipal authority for the 1st, 2nd and 3rd quarters that are based on a sample survey. The financial statement estimate data received from municipalities and joint municipal authorities in the data collection concerning the fourth quarter will be released at unit level starting from data concerning 2017 on Statistics Finland's website in the database Data on finances reported by municipalities and joint municipal authorities .

The data published in the statistics on quarterly local government finances are not directly comparable with the data of the statistics on local government finances by quarter because of the different way of handling local government enterprises. In the statistics on quarterly local government finances, local government enterprises are combined with the data on basic municipalities and joint municipal authorities, while this was not done in the statistics on local government finances by quarter published between 2013 and 2015.

1) In 2018, a number of municipalities transferred the responsibility for the organisation of healthcare and social welfare services to the joint municipal authority they had set up, but municipalities were still responsible for producing the services. Municipalities recorded sales revenue and purchases of services from joint municipal authorities on a gross basis. This recording procedure increased municipalities’ external operating revenue and expenses, but it did not have a net effect on the operating margin. In 2019, the production of the services was transferred to the joint municipal authority, which decreases the operating revenue and expenses of the municipalities compared to the previous year. According to the estimate, without this exceptional arrangement during the comparison year, the operating revenue would not have decreased, and operating expenses would have grown more in January to September 2019.
2) The population data used were the population of Mainland Finland on 31 December 2018.
3) The population data used were the population of Mainland Finland on 31 December 2018.

Source: Quarterly local government finances, 3rd quarter 2019, Statistics Finland

Inquiries: Jens Melfsen 029 551 2578, Karen Asplund 029 551 3611, kuntatalous@stat.fi

Director in charge: Ville Vertanen

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Revision of data (22.11.2019)

Updated 22.11.2019

Referencing instructions:

Official Statistics of Finland (OSF): Quarterly local government finances [e-publication].
ISSN=2343-4139. 3rd quarter 2019. Helsinki: Statistics Finland [referred: 22.11.2024].
Access method: http://www.stat.fi/til/ktan/2019/03/ktan_2019_03_2019-11-22_tie_001_en.html