Financial Equalisation Ordinance (FAV) - Total Tax Burden (FAV)

1. The highest total tax burden of the cantonal, district, and school community taxes constitutes the basis of 100%.

2. The lowest total tax burden shall not deviate by more than 20% from this.

1. Active School Communities within the meaning of the Financial Equalization Legislation are school communities that, subject to Art. 3 of this regulation, operate their own school.

1. Inactive School Districts within the Meaning of Financial Equalization Legislation are School Districts that have not operated their own school for more than five years.

1. The fiscal capacity within the meaning of this regulation is derived from the income and wealth tax for natural persons as well as the profit and capital tax for legal entities (tax assessment), converted to 100 tax points. The relevant cutoff date is December 31 prior to the payment year.

2. The payment year within the meaning of this regulation is the year in which the financial equalization payments are made based on the previous years.

3. If a district has absorbed a school municipality, the average value of the tax points for the districts and for the school municipalities is taken as the average value of the district or the school municipality during the three calendar years prior to the absorption.

1. The determining taxable capacity per inhabitant is derived from the simple arithmetic mean of the taxable capacity per inhabitant. Districts that fall below the determining taxable capacity are adjusted upward to this level.

2. The difference to the determining taxable capacity per inhabitant in accordance with paragraph 1 of this Article, multiplied by the population of the respective district, results in the total taxable capacity that is to be equalized. The total taxable capacity divided by 100 and multiplied by the simple arithmetic mean of all tax points before the payment year (One per mille property tax = 10 tax points) results in the financial equalization amount in Swiss francs.

3. The financial equalization payments are proportionally reduced if their total exceeds the amount of CHF 400,000 per year.

4. The financial equalization payments are financed from the Equalization Fund and, if this is depleted, from the current account.

**1. The tax capacity per person of financially weak school municipalities shall be increased to a maximum of the weighted arithmetic mean of the five financially strongest school municipalities (total tax capacity divided by the total population). An annual total sum of CHF 2,400,000 shall be allocated for the tax capacity equalization.**

1. Step: Calculation of the tax capacity per inhabitant of the school municipalities in accordance with Art. 3 para. 2 of the Financial Equalization Act.

2. Step: Back calculation based on CHF 2,400,000 to determine the threshold to which the tax capacity of those school municipalities should be raised, which are below this threshold.

3. Step: Determination of the difference between the threshold and the tax capacity per inhabitant of the respective school municipality.

4. Step: The population of those school municipalities with a tax capacity per inhabitant below the threshold is multiplied by the result determined in the third step.

5. Step: The result determined in the fourth step divided by 100 and multiplied by the simple arithmetic mean of all tax points before the payout year (one per mille property tax = 10 tax points) equals the financial equalization amount in francs.

**2. Active school municipalities shall receive an amount of CHF 200 per year for each student (kindergarten, primary school, special needs classes, lower secondary school, secondary school, high school 1st-3rd grade), regardless of their tax capacity. The decisive factor is the number of students according to the student statistics of the year preceding the payout year.**

**3. Active school municipalities shall receive an amount of CHF 4,000 per year for each class (class, parallel class or class with multiple grades) they run independently, regardless of their tax capacity. All small, lower secondary, and secondary classes are excluded from this. The decisive factor is the number of classes according to the student statistics of the year preceding the payout year.**

**4. Active school municipalities shall receive an amount of CHF 3,000 per year for each numerically above-average student (average number of students = total number of students in the canton in relation to the total population). These amounts shall be reduced proportionally if their total exceeds CHF 300,000 per year. The decisive factor is the number of students according to the student statistics of the year concerned and the population number as of December 31 of the year preceding the payout year.**

**5. The financial equalization payments shall be financed through the expenditure of the ongoing account of the Department of Education.**

**1. Provided that the criteria for the allocation of hardship contributions, which are determined by the Cantonal Council, are met, the Grand Council may, upon request of the Cantonal Council, allocate hardship contributions after the conclusion of the annual accounts.**

**2. The hardship contributions defined in paragraph 1 of this article may not exceed a total of CHF 50,000 per year.**

**1. Inactive School Communities with Above-Average School Tax Burden**

Inactive school communities with a school tax burden greater than the simple arithmetic mean of the school tax points of active school communities may apply for financial equalization contributions from the State School Commission after the conclusion of the annual financial statement.

**2. Active School Communities Entitlement to Hardship Contributions**

Active school communities may apply for hardship contributions from the State School Commission after the conclusion of the annual financial statement. The Commission establishes the criteria that are decisive for the allocation of contributions to active school communities pursuant to Art. 6 para. 3 of the Financial Equalization Act.

**3. Limit on Annual Hardship Contributions**

The hardship contributions pursuant to paras. 1 and 2 of this Article must not exceed the total sum of CHF 100,000 per year.

**4. Hardship Contributions for Districts Absorbing a School Community**

Districts that have absorbed a school community can only be granted a hardship contribution for the school sector if a separate school account with an income statement and balance sheet exists for the relevant calculation period.

1. Contributions for hardship cases of districts and school municipalities are financed from the financial equalization fund and, if this is exhausted, from the current account.

1. The amounts or contributions within the meaning of this regulation shall be adjusted for inflation for the following year if the national consumer price index has increased by at least 5% since the last adjustment as of September 30.

1. This regulation shall enter into force on January 1, 2003, following adoption by the Grand Council.