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State takeover of municipal debts

The state is to take over a large part of the municipalities' debts, so that the municipalities can make long-term investments without raising taxes. This is proposed by one of the Social Democrats' working groups for new policy.

» Updated: 30 July 2024, 13:19

» Published: 30 July 2024

State takeover of municipal debts
Photo: Nicklas Thegerström/TT

The party believes that a local societal lift is needed, but does not think that the state is helping enough for the municipalities to be able to handle new large establishments.

We want the state to take over a significant part of the municipal debt, says the party's business policy spokesperson Fredrik Olovsson at a press conference.

The municipalities' debts have increased sharply over the past decades, according to the party. It is estimated to be around 200 billion kronor that the state should take over in debt.

This would result in a better distribution between the municipality and the state. It would mean approximately 20,000 kronor per inhabitant in all municipalities in the country.

Lower interest rates

One argument for this is that the state pays lower interest rates over time than the municipalities. The state's borrowing would take place via the National Debt Office, and Olovsson's assessment is that it would take a few years to transfer the municipalities' loans.

The working group also proposes targeted support to certain municipalities that are facing major investments. In addition, a state-owned housing company that will build on establishment sites, a national establishment team that will help with major establishments, and a strategic "infrastructure pot" to strengthen, among other things, the railway.

Does not see wastefulness

Olovsson does not believe that the municipalities' growing debts are due to wastefulness.

This is an argument that is sometimes claimed, that there are a lot of wasteful municipalities. That is, those that have built schools and elderly care. That (wastefulness, editor's note) is an extremely small part of the debt that exists here.

The party set up eleven internal working groups after the election loss in 2022. Which proposals will become Social Democratic policy will be decided at the party's congress in 2025.

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By TTThis article has been altered and translated by Sweden Herald

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