1 Foundations and Organization, Public Charges » 15 Districts and Municipalities » 154 Financial Equalization

Subject Matter

This Act governs financial equalization between the Canton, districts, and municipalities.

Objectives

The fiscal equalisation aims to

a) strengthen the autonomy, self-responsibility, and cooperation of districts and municipalities;

b) support the needs-based provision of public goods and services to the population;

c) promote the effective and economical fulfilment of tasks;

d) reduce excessive disparities in the tax burden among districts and municipalities;

e) ensure appropriate compensation for excessive burdens on municipalities due to their geographical-topographical and socio-demographic factors;

f) be published transparently.

Instruments

1 Financial equalization comprises

a) resource equalization;

b) burden equalization, consisting of geographic-topographic and

socio-demographic burden equalization;

2 The instruments are coordinated and deployed in a targeted manner.

II. Resource Equalization

Horizontal and Vertical Fiscal Equalization

1 Resource equalization proportionally mitigates differences in fiscal capacity among districts and municipalities.

2 A district or municipality is, within the framework of horizontal fiscal equalization

a) liable to make equalization payments if its resource potential per inhabitant is above the cantonal average (100 resource index points);

b) entitled to receive equalization payments if its resource potential per inhabitant is below the cantonal average (100 resource index points).

3 The Canton makes additional contributions within the framework of vertical fiscal equalization to districts and municipalities whose relevant tax capacity falls below the equalization upper limit of 75 to 85 percent.

Resources Potential and Resources Index

1 To determine the differences in the financial capacity of the districts and

municipalities, a resources potential is calculated for the assessment years

according to § 14 para. 2.

2 The basis for calculating the resources potential is the relevant tax capacity.

This corresponds to the relative tax capacity multiplied by the relevant tax rate.

3 The relative tax capacity represents the yield of the simple tax from the tax

revenues of a district or a municipality per inhabitant. The relevant tax rate

corresponds to the ratio between the total tax revenues and the tax capacity

of all districts or municipalities.

4 The resources index reflects the resources potential of each district or

municipality in relation to the cantonal average.

### Scope

1 The resource equalization reduces the difference between the resource potential

per inhabitant of a district or a municipality and the cantonal average.

2 The districts and municipalities liable to equalization contribute to the reduction

of disparities to the extent of 35 percent of the relevant tax capacity that

exceeds 100 index points.

3 The canton provides an additional contribution of 70 to 80 percent of the

difference to the equalization upper limit to the districts and municipalities

entitled to equalization, in accordance with § 4 para. 3.

Financing and Endowment

1 The Canton and the equalization-obligated districts and municipalities finance

the resource equalization.

2 The Government Council annually determines the equalization upper limit within the bandwidth

according to § 4 para. 3 and the endowment rate within the bandwidth according to § 6

para. 3.

**III. Burden Equalization**

Principle and Equalization Mechanisms

1 The canton grants financial equalization to municipalities that are excessively burdened by geographictopographical or sociodemographic conditions.

2 Geographic-topographical equalization reduces additional costs incurred by a municipality due to special geographic-topographical conditions.

3 Sociodemographic equalization reduces additional costs incurred by a municipality due to special sociodemographic conditions.

Indicators

1 The geographical-topographical and socio-demographic equalization of burdens are measured on the basis of indexed indicators.

2 The indicators used in the indices are

a) the altitude of the settlement area;

b) the population density;

c) the transport area;

d) the number of inhabitants;

e) the educational needs (youth dependency ratio);

f) the population composition (old-age dependency ratio);

g) the need for social assistance (social assistance recipient ratio).

3 The Government Council determines the data basis for measuring the individual indicators.

Financing and Endowment

1. The Canton makes annual contributions of at least 10 to a maximum of 20 million Swiss francs for geographic-topographic burden equalisation.

2. The Canton makes annual contributions of at least 5 to a maximum of 15 million Swiss francs for socio-demographic burden equalisation.

3. The Government Council annually determines the endowment of the equalisation mechanisms.

**IV. Structural Preservation**

Structural Contributions

1. Prerequisites for structural contributions to municipalities are

a) below-average population;

b) unreasonable burden due to the performance of tasks.

2. The Canton provides structural contributions of a maximum of 5 million Swiss Francs per year.

3. The Government Council annually determines the structural contributions, taking into account the population, financial data, and contributions from the resource and burden equalization. It regulates the procedure and may impose conditions for the structural contributions.

Infrastructure Projects

1 The Canton may grant contributions to municipalities with below-average population numbers for the creation or renewal of infrastructures that are necessary for an needs-based supply of the population and would otherwise lead to an unreasonable burden.

2 The Cantonal Council decides on contributions to infrastructure projects upon application by the Government Council. There is no entitlement to the payment of contributions; the Cantonal Council may decide on additional conditions.

3 The Government Council regulates further prerequisites and the procedure.

V. Procedure

Financial Data and Financial Statistics

1 The Department of Finance shall compile financial statistics.

2 The collection, processing, and publication of financial data shall generally take place in electronic form.

3 Districts and municipalities are obliged to provide the Department of Finance with the data and documents necessary for financial statistics.

Basis of Assessment

1 The financial equalization payments are determined on the basis of the data according to § 9 as well as the data from the financial statistics.

2 The resource equalization is measured according to the data from the fourth to the second year prior to the equalization year. The burden equalization is measured according to the data from the fifth to the third year prior to the equalization year.

3 The equalization year is the year in which the financial equalization payments are paid and accounted for.

Duty to Provide Information and Cooperate

The districts and municipalities are obliged to provide the competent cantonal authorities with the information necessary for the enforcement of this law and to make available the required data.

**VI. Responsibilities and Supervision**

Enforcement

1 The department designated by the Government Council is responsible for the enforcement of this Act, unless this Act provides otherwise.

2 It performs its tasks in particular by

a) compiling financial statistics and necessary calculations;

b) granting districts and municipalities, upon request, a right of inspection into the data and documents concerning them and essential for the enforcement of this Act;

c) carrying out controls to verify the collected financial data and assessment bases;

d) being responsible for the recovery and redistribution of unjustified fiscal equalization payments.

3 Fiscal equalization payments that have been determined and disbursed based on incorrect assessment bases or calculations may be corrected by the Government Council up to five years after their determination.

### Effectiveness Report

1. The Cantonal Council shall receive a report from the Government Council four years after the entry into force of this Act, and every six years thereafter, on its implementation and impact.

2. The effectiveness report shall determine whether and to what extent the goals of financial equalization have been achieved in the past period.

3. It shall include any measures for the upcoming period.

### VII. Transitional and Final Provisions

Repeal and Amendment of Existing Law

1 With the entry into force of this Act, the following are repealed

a) Act on Fiscal Equalisation of 7 February 2001

b) Act on Contributions to School Facilities of 26 November 1986

2 The following enactments are amended as follows

a) Tax Act of 9 February 2000

Section 199 subs. 1 to 3

Subs. 1 is repealed.

Former subs. 2 and 3 become subs. 1 and 2.

b) Introductory Act to the Federal Act on Health Insurance of

19 September 2007 (EGzKVG)

Section 13 subs. 2

Subs. 2 is repealed.

c) Act on Social Facilities of 28 March 2007 (SEG)

Wird aufgehoben.

Shall be repealed.

**§ 25a (new)**

**c) Partial Revision 2023**

1 Applications for building contributions for social institutions that are pending at the time of the entry into force of the amendment of October 25, 2023, shall be treated under previous law.

2 Applications shall be deemed pending if a commitment for a cantonal contribution has been made.

**d) Fire Protection Act of December 12, 2012 (FSG)**

**§ 3 para. 2**

2 The municipalities shall appoint their own or a joint fire protection expert in the field of preventive fire protection. Subsidiarily, the canton may permanently assume their duties if the municipality can no longer ensure effective enforcement.

**§ 6 paras. 2 lit. d and 3**

2 (It is particularly responsible for:)

d) the control, supervision, and coordination of the management, operational readiness, training, and equipment of fire brigades and fire protection bodies.

3 It shall regulate with the municipality the assumption of the duties of the fire protection expert.

**§ 15 para. 3**

3 The canton shall, upon application by the municipality, be responsible for the procurement of the operational equipment for members of the fire brigade. The Cantonal Government shall determine the items of operational equipment.

**§ 44 para. 1 lit. b**

1 (The canton shall grant contributions to municipalities and enterprises with a company fire brigade for:)

Lit. a unchanged

b) personal equipment, communication devices, extinguishing and rescue material, and vehicles for the fire brigade, insofar as they are not procured by the canton.

**e) Public School Act of October 19, 2005 (VSG)**

**§ 23 para. 2**

2 In doing so, they shall be guided by the recommendations of the Education Council regarding room program and equipment.

**§ 67 para. 3**

3 The lump-sum contribution per school child shall be 50 percent of the determined weighted average value of all municipalities. For the districts, the regulation for the calculation of the lump-sum contribution shall apply mutatis mutandis. The Cantonal Government shall fix the lump-sum contribution annually.

**§ 77 Partial Revision 2023**

1 Applications for building contributions for school facilities and institutions that are pending at the time of the entry into force of the amendment of October 25, 2023, shall be treated under previous law.

2 Applications shall be deemed pending if a commitment for a cantonal contribution has been made.

**f) Act on the Promotion of Public Transport of November 26, 1987 (GöV)**

**§ 11 lit. e**

(The Cantonal Government is responsible for:)

e) the distribution of contribution amounts to the municipalities according to § 9, which must be based on the transport service offered, and for charging the districts their share of the municipal amounts.

**§ 19 Transitional Provisions**

**a) Subsequent Calculations**

The offsetting of the balances from the subsequent calculations in the resource equalization of the districts and municipalities shall be carried out proportionally over five years with the second equalization payment.

**§ 20**

**b) Special Financing for Real Estate Capital Gains Tax**

1 The balances of the special financing for the real estate capital gains tax for the districts and municipalities shall be offset with the second equalization payment.

2 The offsetting shall be carried out proportionally over five years on the basis of the average fiscal capacity of the years seven to two before the second equalization payment.

Referendum, Publication, Entry into Force

1 This Act is subject to an optional or mandatory referendum in accordance with §§ 34 or 35 of the Cantonal Constitution.

2 It shall be published in the Official Gazette and, after its entry into force, included in the collection of laws.

3 The Government Council is entrusted with the implementation. It shall determine the date of entry into force.

1 GS 27-19.

2 GS 20-37.

3 GS 17-617.

4 SRSZ 172.200.

5 SRSZ 361.100.

6 SRSZ 380.300.

7 GS 27-19.

8 SRSZ 530.110.

9 SRSZ 611.210.

10 GS 27-19.

11 SRSZ 781.100.

12 January 1, 2025 (Abl 2024 1044).