Bergen City Council may have to break its promise to halve property tax – news Vestland

After the local elections in September, Høgre has been in power in the four largest cities in the country. In Oslo, Bergen and Stavanger, the civil majority promised to remove or reduce the property tax on residential properties within four years. In Trondheim they wanted a reduction, and in any case promised not to increase the tax. But the “target achievement” of the four Høgre-governed cities is, to put it mildly, astounding. In Stavanger, the deputy mayor promises that they will remove the entire property tax already in the 2025 budget, which will be adopted this autumn. In Bergen, the city council is now announcing that the promise to halve the property tax by 2027 may be difficult to fulfill. In that case, this will be the second time in less than a year that city council leader Christine Meyer (H) has broken an important promise she made to the voters. Break of promise gave power In the autumn, Meyer became city council leader in Bergen with the help of a spectacular break of promise about the Bybanen – the most inflamed political issue in the city. The two most high-profile promises Bergen Høgre had made to the voters before the local elections were: Accept light rail construction along the front of Bryggen Halve the income from the property tax on housing within four years The first promise was made by Meyer just after the election in order to gain majority support in the city council. Høgre was thus able to take over city council power together with the Progress Party and the Center Party, after eight years with a Labor Party-dominated city council. Now the promise of property tax also hangs in the balance, because the municipal finances are so tight. – We have to compromise with our own ambitions in order to get the economy on the right track. This is what finance councilor Jacob Mæhle (H) told Klassekampen måndag. After only two weeks as finance councilor, Jacob Mæhle (H) announces that Høgre may have to break his promise to halve the property tax in Bergen. He denies having “swept in and reality-oriented” the rest of the city council. Photo: Lars Chr. Wallace / news Cold shower from new city council He announces this two weeks after he became a member of the city council in Bergen on 5 August. – Our most important project is to regain control of the economy. We are forced to look at all possibilities – turn over every stone. This means that we also have to look at whether we can cut property tax in this budget, says Mæhle to news. – What do you want to say to the voters when Høgre broke the Bybane promise last year and now perhaps breaks the promise about property tax? – I think all the voters understand that the most important job is to ensure that the municipality has control over the economy. We are content with that before we can cut the property tax. – Was this an unrealistic choice? – No, but I think it has been under-communicated to the vast majority of Bergen residents how big the financial challenges the municipality is facing. Mæhle still does not reject the goal of halving property tax within four years. – I hope it is very likely. I have every intention of achieving that. For Bergen municipality, halving the property tax will mean NOK 400 million less income per year. In the 2024 budget, the city council reduced the property tax income by NOK 57 million. “Self-reinforcing negative spiral” in Bergen Finance Council Jacob Mæhle (H) points out that the municipal administration now depicts the financial situation in Bergen as a “self-reinforcing negative spiral”. – The outlook is pitch black and even worse than people thought. We have accumulated more consumption and a very high level of investment over time. Income from the state has been reduced. Changing demographics (the “eldrebölga”) results in reduced tax revenues. And we can no longer rely on the same dividends from the companies that the municipality owns. – The opposition party already said in the election campaign that the tax cut was impossible. As a new city councilor, have you now come in and oriented the rest of the city council to reality? – No, I think the whole city council and all the cooperation parties have been very keen on the fact that it is demanding to get the property tax cut. We have to turn our economy around first, and then see what leeway we have to cut the property tax, says Mæhle. – The most important thing we can do is to ensure that we have a municipality that can continue to deliver the statutory services and be a good city for its residents. The Finance Council in Bergen nevertheless does not reject the goal of halving property tax within four years. – The entire city council is determined that it should be cheaper to live in Bergen for all Bergen citizens. But we have to prioritize how quickly we are going to proceed with that work, says Mæhle. In 2012, Høgre and Framstegspartiet had the city council power, and removed the property tax in Bergen. But three years later they had to introduce the tax again. – Didn’t they learn anything that time? – The ambitions are still very clear. We want to cut the property tax. We just have to make sure we find room for action for that first, says Mæhle. – I believe that we will get a long way in the effort to spend less money. But there must be cuts and adjustments that stand up over time. So this is a kind of handshake to the opposition that shows that we are willing to look at everything. – The property tax cannot be cut until we have gained control over the economy, says the new finance council in Bergen. Photo: Leif Rune Løland / news Ap: – The right-wing tricked voters City council representative Linn Kristin Engø (Ap) was mayor of Bergen in the last year before the election last year. She is not impressed by the signals from finance council Mæhle. – The voters who voted Høgre in Bergen should feel cheated. And I wonder how many key campaign promises are left for Høgre to break. – We warned several times that it is not possible to scrap the property tax in Bergen without making dramatic cuts within kindergarten, school, care for the elderly, all the important services of the municipality. But Christine Meyer repeated the lie that the property tax was going away, says Engø. She reacts to the fact that it is the new finance council that is now casting doubt on the tax cut. – It is strange that Christine Meyer herself is not the one to cancel the promise, since she was so central in promising it several times in the election campaign. Linn Kristin Engø i Bergen Ap believes city council leader Christine Meyer deceived the voters and should herself cancel what Engø calls Photo: Leif Rune Løland / news Skuldar Høgre for deception and lies Linn Kristin Engø i Bergen Ap gives Høgre responsibility for the difficult municipal economy of Bergen, and salutes it is certainly welcome that Høgre drops tax cuts. – I am glad that they finally realize what we spent large parts of the election campaign emphasizing. But in contrast to Høgre, we are not willing to deceive the voters in the election campaign and lie about what we will spend money on, says Engø. – What responsibility does the Labor Party have for the depressed economy after governing Bergen for eight years? – We delivered a healthy municipal economy. We have never planned to cut NOK 400 million in operations. If we are to have good kindergartens, safe schools and good care for the elderly, we are forced to spend money. – Surely the difficult economic situation did not arise after Ap lost power last year? – Høgresida’s irresponsible economic policy, which we have seen before in this city, is the reason why Bergen municipality is currently in a demanding economic situation. – Isn’t it a disclaimer to show that Høgre ruled until 2015, when Ap has been in power for eight years after that? – No, because we rebuilt the municipality’s savings accounts. We have had a predictable property tax in this period, and we have prioritized the important tasks the municipality has, says Engø. Oslo is “on track” How is the “fight against the property tax” faring in the other three Høgre-controlled cities? Oslo City Council aims to abolish the property tax on housing in four years. Already two months after the election, the city council party Høgre og Venstre made the first cut. – In a few weeks, we have cut the property tax on housing by almost 30 per cent, and are on track to remove it completely within four years, said city council leader Eirik Lae Solberg (H) in November. In 2024, Oslo will thus have NOK 315 million less income from property tax than the outgoing Labor city council would have provided, according to Solberg. – The majority of the reduction is due to an increase in tax deductions. It gives a good social profile, he said. Reduced property tax in Oslo The Oslo City Council has decided to increase the basic deduction in property tax on housing from NOK 4 to 4.7 million in 2024, while at the same time reducing the tax rate from 3 to 2.8 per thousand. With city councilor Johansen’s proposal for the budget, the proportion of housing units that paid property tax in Oslo would be 47%. According to the new city council’s additional proposal, the proportion is around 35% in 2024. Trondheim: – Challenging In Trondheim, property tax has risen sharply in recent years. It is now far higher than, for example, in Oslo. The city council (Høgre, Venstre and MDG) has promised that the property tax will be frozen at the current level: NOK 890 million annually. – We expect to be able to do that, although it is of course challenging enough. And we have a goal to reduce the property tax if the economic situation allows it, says finance councilor Kjetil Reinskou (H) to news. He admits that it is a very round formulation. – The reason why we are not taking action more aggressively is that the municipal economy around Norway is weak at the moment. So, unfortunately, as of now, it’s ambitious enough for us. Will protect the service offer and reduce tax Like party colleague Jacob Mæhle in Bergen, Eirik Reinskou (H) is also new to the role of finance councillor. On 13 June, Trondheim switched to a parliamentary form of government and got its very first city council, which consists of Høgre, Venstre and MDG. – We must deliver services to our citizens at a good, safe level. That is probably the most important thing for us. Our aim is to protect the service offer, and at the same time keep the property tax at the current level, and hopefully be able to reduce it. Even within the municipal sector, there is something to gain from restructuring and doing things better, says Reinskou. Next year, property tax will end for both old and new residential buildings in Stavanger. The majority party then removes the last remnant of this tax. Photo: Inger Johanne Stenberg / news Stavanger: – Removing the entire tax next year Stavanger municipality has stated that they annually collect NOK 280 million in property tax. The majority coalition (Høgre, Frp, KrF, Venstre and Pensjonistpartiet) aims to remove the property tax within four years. – We will remove half of this year’s budget and remove the rest next year, says deputy mayor Henrik Halleland (KrF) to news. Mayor Sissel Knutsen Hegdal (H) is a little less certain: – Whether we will be able to remove the entire tax this autumn has not been decided, but the ambition is to do it before the next election, she says. This year they covered most of this loss of income by increasing the income from income tax. – How we solve it in 2025, we will come back to in the budget later this autumn, says Halleland. Published 22.08.2024, at 21.11



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