The Swedish municipality of Filipstad is facing a financial crisis due to taking in too many migrants during the 2015 migrant crisis and is now looking to hike taxes by ten per cent to cover costs.
The proposed tax hike would take place by 2022 and is in response to the surge in social costs due to the mass migration of asylum seekers to the municipality, with local Social Democrat politician Åsa Hååkman Felth saying the area is in dire need of help, Expressen reports.
“In the municipality, we have no jobs for people who have studied and have a good education, so they move. Those who remain with us are those who have no education and who are not ready for the labour market. Maybe even illiterate,” Felth said.
“Making a change costs a lot of money then. You have to start from the beginning, so to speak,” she added.
She added that funding promised by the national government was just “a drop in the ocean”, saying the municipality received only around 10 million Swedish krona (£800,000/$1 million), when it needed at least 100 million krona (£8 million/$10.3 million).
Minister of Civil Affairs Lena Micko, also a Social Democrat, said that while the government was aware of the predicament of Filipstad, the total needs over other municipalities had to be taken into consideration.
“A combination of measures will be needed to protect welfare. Municipalities need to adjust to the challenges they face. The state should support this work, but a great responsibility also lies with the municipalities,” she said.
Filipstad initially sounded the alarm over their financial situation last year in September, noting that many tax-paying residents with jobs had moved away, weakening the overall tax base.
In 2018, Urban Hansson Brusewitz, head of the National Institute of Economic Research (KI) predicted that municipalities would be forced to increase taxes in order to pay for social costs related to population growth and mass migration.
“We are facing some years of demographic challenge, which makes me a little worried that the municipalities may be forced to raise taxes,” he said.