The Swiss Times - Swiss News in English

State accounts largely close better than budgeted

So far, 21 cantons have submitted their 2023 state accounts. Eleven of them recorded a deficit. It is striking that eight cantons closed the year much better than budgeted, while eight others did better. The biggest "outlier" was Geneva.

Instead of the budgeted deficit of CHF 476 million, the bottom line was a surplus of just under CHF 1.4 billion. Zug is placed behind Geneva in the surplus ranking with CHF 461 million.

When it comes to the deviation from the budget, however, Basel-Stadt is in second place after Geneva. The city canton budgeted a surplus of just CHF 13 million and closed with a surplus of CHF 434 million. The Aargau state accounts show a surplus of CHF 119.5 million, whereas the canton had expected a deficit of CHF 296.5 million.

Instead of a huge deficit of CHF 353 million, Zurich got away with a deficit of CHF 2 million. Graubünden turned a deficit of CHF 17.7 million into a surplus of CHF 162.4 million, and Lucerne did the same with a surplus of CHF 146.2 million instead of a deficit of CHF 21.1 million. In Schwyz, the surplus multiplied from CHF 2 million to CHF 66 million

Among the cantons with greatly improved annual financial statements is Vaud, which reduced its budget deficit for the first time in years from CHF 230 million to CHF 39 million. Solothurn, Nidwalden, Thurgau, Appenzell-Innerrhoden and Glarus also reduced their deficits compared to the budget, most significantly Solothurn and Nidwalden.

Solid tax revenues

The finance directors cited cost-cutting measures on the one hand and lower-than-budgeted expenditure for refugees from Ukraine, for example, as the reason for the better final accounts.

Ernst Stocker (SVP), Zurich Finance Director and President of the Conference of Cantonal Finance Directors (FDK), emphasized the development of tax revenues. These had made a significant contribution to the improvement in some cantons, he said in response to a question from the Keystone-SDA news agency. However, the differences between the cantons had increased.

The profit distribution of the Swiss National Bank (SNB) was canceled in 2023 and is also set to be canceled in 2024, which was met with criticism from economists. They accused the central bank of filling the currency reserves at the expense of the distribution reserves.

Three cantons with higher deficits

The fact that the National Bank distribution is an important budget item for the cantons is illustrated by the three cantons of St. Gallen, Basel-Landschaft and Uri, where the deficit increased compared to the budget. Basel-Landschaft closed with a loss of CHF 94 million instead of CHF 6 million.

In St. Gallen, the deficit grew by almost 40 million francs to 199.9 million francs, and the deficit in Uri rose by 8.2 million francs to 20.5 million francs. All of them blamed the failed distribution.

In addition, there were provisions for inherited liabilities, hospital costs and the like. Uri also had lower concession income from electricity production.

Bern, which according to the budget wanted to achieve a precision landing with a surplus of CHF 100,000, ended up with a deficit of CHF 13 million. However, the government described this as a "red zero" in view of the large budget volume.

Different financial prospects

In line with the cantonal leaders, FDK President Stocker described the financial outlook for the cantons as mixed and characterized by major differences. In addition to further cost-cutting measures in a number of cantons, the canton of Thurgau, for example, is considering a tax rate increase for six years, which would cancel out the tax relief of recent years.

According to Stocker, the strength of the economy and the solid income of taxpayers have supported public budgets in the past. However, demands have grown and, in the longer term, demographics will increase the need for healthcare and long-term care. The cantons would have to bear the main burden in these areas in particular and would have to expect additional expenditure.

In the 2024 budgets, a majority of cantons are expecting a deficit despite the actually favorable economic situation and therefore positive development of tax revenue. The lack of SNB profit distribution, healthcare and social costs as well as inflation play a decisive role here.


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