The mayor's proposal for the 2025 budget of the city of Riihimäki

The 2025 budget planning of the city of Riihimäki has been guided by the guidelines of the stable economy program. According to the program approved by the City Council in the spring of 2024, the city aims for savings of 4,2 million euros in the planning period 2025–2027.

According to the program, 2,2 million euros of savings in operating expenses will be allocated to the year 2025 and 2,0 million to the years 2026–2027. The savings target defined in the program has guided the preparation of the budget and plan of the city's industries and boards. In addition, the city committed in the program to phase and prioritize investments in order to curb the amount of debt.

"The financial directors of the municipalities have assessed the financial prospects of the municipalities as bad or very bad. In addition to national challenges, global challenges also affect the operating environment of cities. That's why I'm satisfied with how responsibly and profit-oriented we've balanced the city's economy in Riihimäki", says city manager Jouni Eho.

The mayor's budget proposal has a deficit of EUR 0,7 million for the parent city (the city of Riihimäki without the water supply company). When the water supply company is added, the result is a surplus of 1,1 million euros.

The stable economy program does not include layoffs or furloughs of city personnel. About 1 people work in the city.

Savings from all industries

The city's largest operating cost savings in terms of euros are directed, among other things, to ICT services (500 euros) and personnel benefits (000 euros). In addition, some of the city's vacancies will remain unfilled in 80, and industries will save significantly on the purchase of expert services.

"The operating cost savings required by the stable economy program are generated from numerous streams of different sizes. Without the implementation of the program, we would have a deficit of three million euros. The industries deserve thanks for this work", says Eho.

The education and welfare sector is the only one of the city's four sectors that did not stay within the given budget frame in terms of operating margin. This is explained by the considerable increase in personnel expenses and purchase service costs. The reason for the increase in personnel expenses is contract increases in the municipal sector and personnel increases to meet the growing need for support for children.

13,7 million euros for investments

The goal of Riihimäki's strategy is to build an irresistible quarter of a city, a home for the creators of the future and a community of sustainable growth. In order to achieve the goals, the net investments of the mother city are a total of 13,7 million euros, which is 8,5 million euros less than in the original budget of 2024. The share of municipal engineering investments is around 8 million euros and space investments around 5 million euros.

"The city gave up on the investment of the Eastern school and kindergarten and the housing fair project. Thanks to the decisions, we will significantly curb the growth of the city's debt. Managing indebtedness and phasing out investments is still important," says Eho.

Next year's most significant investments are the construction of Jokikylä's public areas, 4,0 million euros, the design and start of construction of small group facilities for individual teaching, 1,0 million euros, and the start of the renovation of the old town hall, 1,0 million euros. 1,2 million euros have been set aside for the basic improvement of streets and parks, and about 1,5 million euros have been set aside for the basic improvement of the city's offices.

The municipal tax rate is 7,9 percent

The mayor proposes 2025 percent as the municipal tax rate for 7,9. The municipal tax percentage will be the same as in 2024. The real estate tax percentages will also remain unchanged according to the proposal. The general property tax is 1,45 percent.

The city mother's operating income of EUR 2025 million (EUR 42,1 million in 36,5) in the mayor's 2024 budget proposal includes manufacturing for own use. Operating expenses are EUR 122,2 million (110,3). Operating margin is EUR 79,3 million (73,3). The operating margin will decrease by approximately six million euros compared to 2024.

The city's tax revenue is 75,7 million euros and the state's contributions are 10,3 million euros. Tax revenues and state contributions will rise from the level of 2024. With the withdrawal of state contributions, the state compensates for the funding of employment and business services and the municipal share of unemployment benefits.

The parent city's annual profit is 7,3 million euros and the result for the financial year is 0,7 million euros in deficit. The result of the water supply business is 1,8 million euros surplus. The city's total result is a surplus of 1,1 million euros. The city's loan amount at the end of the 2025 budget year is EUR 92,2 (88,3) million.

The sustainability of the economy must be taken care of

The 2025 budget is in deficit, so the city has an obligation to take care of adjusting the economy to a sustainable level. The most significant points to be considered are related to the development of the general economic situation, inflation and interest markets, as well as the general change in the world situation.

The transfer of employment and business services from the state to the municipalities and the social security reform affecting the financing of the municipalities until 2027 will have the greatest impact on the revenue and expenditure base of the municipalities. The spring 2025 salary settlement will also have a significant impact on the municipality's expenses.

The cumulative surplus of the city's balance sheet and the surplus forecast for 2024 still create a good starting point for the coming years. Due to decreasing tax revenues and state contributions, as well as planned investments, the city must pay attention to the sustainability of the economy in accordance with the program for a stable economy drawn up in the spring.

The city government will discuss the budget proposal on Monday, November 4, and the city council will decide on the budget on Monday, November 11, 2024. The council meeting can be followed on site at Uramo school or  on the city's YouTube channel.

Additional information

Mayor's review

City Council agenda for November 4

City economy page

Stable economy program page