Local municipalities will now receive a permanent increase in funding for legally required services for people with disabilities. RÚV reports that this increase will amount to ISK 5 billion [$35.028 million; €33.043 million] a year.
Per an announcement on the government’s website, the agreement was c0signed by the chair and executive director of the Association of Local Authorities and the Ministers of Finance and Economic Affairs, Infrastructure, and Social Affairs and the Labour Market on Saturday. It is aimed at helping local municipalities “achieve established performance and debt targets according to the current financial plan for the years 2023 – 2027.”
Under the terms of the agreement, local taxes will increase by .22% against a corresponding reduction of state income tax. The tax burden on individuals will not change, however. Rather, the agreement deals with the specific transfer of funds from the state to local municipalities.
Local municipalities have long called for increased funds to provide services for people with disabilities and are still calling for higher contributions. Per Saturday’s agreement, both local authorities and the three undersigning ministries agree to conduct expense analyses for services provided with the aim of renegotiating the agreement next year.