Coronavirus will put a strain on public finances


BERN – The public finances of municipalities and cities in Switzerland could be put to the test by the coronavirus crisis. However, tax increases should be avoided as far as possible, according to a survey carried out by the Union of Swiss Cities on about seventy of the 131 members, including Lugano, Bellinzona, Locarno and Chiasso.

Compared with a drop in rental income and earnings of municipal companies, as well as a future decrease in tax revenues from 2021, the Swiss municipalities intend to overcome this crisis situation by increasing debt, reducing expenses and using existing funds, indicates the Union in a note today, adding that the damage caused by Covid-19 is still difficult to quantify.

Among the 70 cities that responded to the survey, about 80% in the last period took measures in favor of commercial tenants and 60% replied that they had given a hand – financially – to artisans and independents. In general, many municipalities have activated in various ways to support the population and entities active in the area.

However, lost revenue from the coronavirus crisis will add to the effects of tax reform and AHV funding (RFFA), warns the Union of Swiss Cities. The organization invites the cantons to apply the “municipality clause”, according to which the cantons must grant them adequate compensation.

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