The municipalities’ financial buffer is working
Municipal finances were already in a weak position before the COVID-19 pandemic due to urbanisation, population ageing, and rising expenditures. The pandemic increased especially health and social service costs while reducing municipal revenues, but the state pledged to support municipalities in order to compensate for the economic effects.
According to the article, Finland’s tax and transfer system mitigates the effects of recessions in such a way that municipal tax revenues were expected to remain relatively stable despite rising unemployment. (AI translation)
