Reykjavík City Council Approves Extensive Budgetary Measures Skip to content
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Reykjavík City Council Approves Extensive Budgetary Measures

At a meeting yesterday, Reykjavík City Council approved measures intended to save over ISK 1 billion in operational costs over the coming year, RÚV reports. Among the measures are the expansion of paid-parking zones and decreased subsidies for electric-vehicle charging stations located by apartment buildings.

92 budgetary items

At a City Council meeting yesterday, the majority submitted an amendment to Reykjavík’s 2023 budget. The amendment comprises a total of 92 items, which are expected to save over ISK 1 billion ($7.1 million / €6.7 million) over the coming year.

As noted in the meeting’s minutes, City Council deems that the measures reflect “sensible financial management,” noting that the pandemic has impacted municipalities all over the country. “The reaction is natural and befitting the occasion, serving to protect front-line services and vulnerable groups.”

Among the measures are amendments to meal purchases for preschools; reduced opening hours for youth centres (which will close at 9.45 PM as opposed to 10 PM), museums, and swimming pools (during holidays); expansion of paid parking zones; and decreased subsidies for electric-vehicle charging stations near apartment buildings; among other things.

In an interview with RÚV on Wednesday, Einar Þorsteinsson, Chair of City Council, stated that the residents would “feel these changes.” These budgetary cuts were not fun but necessary in order to improve Reykjavík’s finances.

Operational losses of over ISK 11 billion

During its meeting yesterday, the City Council also reviewed an interim financial statement for the city’s operations during the first nine months of the year. The statement revealed that the city’s “A Section” – primarily funded by taxpayer money – was operated at an ISK 11.1 billion ($7.1 million / €6.7 million) deficit.

In a press release published yesterday, City Council stated that numerous factors had impacted its finances: “A new variant of COVID-19 at the beginning of the year put temporary pressure on operations, especially on the school and welfare system. The war in Ukraine, in addition to the pandemic, led to a shortage of raw goods and slowed down production time, which has negatively impacted global markets and led to increased inflation among our trading partners. The Central Bank, owing to rising real-estate prices, high inflation, and overheating of the domestic economy, raised key interest rates; all of this has had an impact.”

As noted in a press release on the City’s interim financial statement, however, the City’s A and B sections – the “B” section includes businesses in part or whole ownership of the city, such as Reykjavík Energy (OR), Associated Icelandic Ports (Faxaflóahafnir), Sopra bs. and Strætó bs., among others – produced a surplus of ISK 6.8 billion ($48 million / €46 million).

This article was updated at 11 AM.

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