Vantaa is developing and building its future – “Moving full speed ahead with Vantaa light rail in 2025”

In 2025, we fill especially focus on the wellbeing and education of children and the young, as well as on the city's safety. We will be implementing for the TE Services reform, which transfers the responsibility for employment, municipal education, and business services to municipalities, and which, consequently, changes the city's operations and economy. Furthermore, we will responsibly manage our economy, regardless of fluctuations in the operating environment.

"The budget is now extremely tight, since municipal finances are not doing well. Nevertheless, in 2025, we will invest in those issues that will bring us growth and vitality in the future, such as Vantaa light rail," says mayor Pekka Timonen.

Figures in brief

The city's and funds' combined operating income in the 2025 budget amounts to €369 million, while the operating costs amount to €1 143 million. Compared with the 2024 budget, the operating income will grow by 7.5% and operating costs by 10.7%. The TE reform-that enters into force as of the beginning of 2025-is the main factor increasing operating costs.

Tax revenues and state contributions cover around 73% of the city's operating costs in 2025. The annual margin of the 2025 budget is €71 million and the deficit for period is -€48.7 million.

The 2025 result for period is estimated to be highly negative, as was the case in 2024, as well. The weak economic situation is manifested in the municipal finances of Finland as a whole. In Vantaa, the drastic decline in building has a negative impact on the city's land-sales revenues. Likewise, increased unemployment curbs increase in tax revenues and has increased the city's expenses.

Cautious believe in a better future - Vantaa's overall situation

The strong inflation development and the resulting increased interest level turned the economy of Finland into recession in 2023. It now looks as if the decline in Finland's economy were halted, and the economy is forecast to grow again in 2025, which is boosted by the interest rate reductions launched by central banks. Moreover, moderate inflation supports the development of purchasing power, and the export markets are forecast to grow.

In 2023, Vantaa's population increased by approximately 4,600 residents (1.9%), which is 1,000 more than in 2022. In 2024, Vantaa's population is estimated to grow by more than 4,000 residents, and the number of population surpassed the 250,000-resident milestone in August. Population growth is projected to remain the same in the near future, but the drastic fall in residential building may decelerate it.

In 2023-2024, only few new residential building projects were started, which is already seen in the reduced number of housing units completed in the course of 2024. The number of completed housing units is forecast to remain at the level of approximately 1,000 housing units, whereas more than 3,000 housing units were built during the previous years.

The recession also increased Vantaa's unemployment rate in the latter part of 2023. In July 2024, Vantaa's unemployment rate was 13.3% with a growth of 1.7% compared to the rate in the previous year. The increase in the number of the long-term unemployed has continued as of fall 2023. The number of jobs has diminished to a significant extent, which slows down more positive employment development, regardless of the gradually improving economic situation that is widely forecast.

TE reform to change the city's operations and economy

The TE reform, which enters into force as of the beginning of 2025, will transfer the state's public services, supporting employment and business growth, to the municipalities' responsibility. In other words, they will become part of the municipalities' employment and vitality tasks. A significant number of employees will transfer from the state to the municipalities, and the municipalities' responsibility for unemployment benefits increases. This makes it possible for the City of Vantaa to devise a new service concept that aims at more efficient work from the perspectives of improving employment, integration, and vitality. The TE reform will increase the city's expenses, but it will correspondingly also increase the city's state contributions.

Vantaa's big vitality-increasing investments

The 2025 budget has allocated added resources to meet the increased statutory service needs of, especially, education, early childhood education, and urban culture. The services are also aimed to bolster the city's growth. The cost-increasing impacts on services, due to the general price development, have also been accounted for. The city will implement Vantaa's 50th jubilee year council decisions made in 2024.

In the near future, Vantaa's investments will be historically big. The city council decided in 2023 that Vantaa light rail, that is, the new express streetcar line, will be built. The decision was made on September 23, 2024, in the MAL (land use, housing and traffic) negotiations conducted between the state and the metropolitan area cities. The state will finance 30% of Vantaa light rail's building costs, which was the city council's requirement for building the light rail. The state's financing share consists of direct state financing, as well as the state's transfer of land to Vantaa. The light rail is estimated to begin traffic in 2029.

"The light rail is the biggest investment in the history of Vantaa, and its building will progress at great speed in 2025. The city will also implement other important vitality-increasing investments in the coming year. At the same time we must manage the city's economy in a responsible manner to contain indebtedness and to return to balanced economy," Timonen says.

In addition to daycare centers and schools being built and being completed, Building Elmo swimming hall will continue. Kuusijärvi Recreation and basic renovation of Håkansböle manor's main building will be completed. As far as the group company's projects are concerned, Tikkurila Competence Campus is progressing, and Vehkala vocational institution is scheduled to be completed.

Balancing the city's economy consistent with the productivity and growth program has been delayed. Increase in annual margin is important in coming years because, in addition to investments in Vantaa light rail, the city's basic investments are on the rise, and the city's debt will increase to a significant extent.

Key investments in 2025

• Vantaa light rail
• Elmo swimming hall
• Tikkurila Competence Campus
• Kuusijärvi Recreation Centre Vantaa's new smoke saunas and info and bathroom facilities
• Basic renovation of Håkansböle manor's main building
• Vehkala vocational institution
• Four new daycare centers
• Renovation of five schools; expansion will be made in two of the schools.

Year 2025 key figures

• population: 256 870 (forecast for Dec. 31, 2025)
• deficit for period -€48.7 million
• income tax return: €66.6 million
• internal financing of investments: 30%
• tax revenues: €2 421 / resident
• operating costs: €4 448 /resident
• loan portfolio: €4 144 /resident

Proposed tax percentages

• income tax percentage: 6.4
• public real-estate tax percentage: 1.28
• soil base percentage: 1.30
• permanent residential building: 0.41
• other residential building: 1.25
• power plant: 3.10
• unbuilt building plot: 6.00

Next

The mayor's budget proposal will progress to decision-making. The city executive board is scheduled to give its budget proposal to the city council on November 5, and the city council is to decide on the budget on November 18.

Additional information

See the video of the city council's budget meeting on September 30, on Vantaa channel (in Finnish).

On Thursday, October 3, at 15:00, the deputy mayors will review the budget proposal per departments. Watch it live or later on Vantaa channel (in Finnish).

Visit our website and read more about the different departments' highlights for year 2025. You will find the above on the following websites: vantaa.fi/budget

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