Amsterdam gears up for steep budget cuts; raising tourist tax a possibility

DutchAmsterdam.nl — Pay up for the ferry to and from Amsterdam-North. Spend less on arts and culture. Raise real estate and tourist taxes, and make people pay more for parking permits. Budget cuts in the areas of education, healthcare, roadworks, and a sharp reducation in the number of civil servants.

Those are some of the options Amsterdam’s Municipal Executive board will have to choose from in order to make sure the city will live within its budget while facing steep cuts over the next four years.

Through 2014 Amsterdam city will have to save a total of 620 million Euro, starting with 90 million Euro in 2011 and and escalating to 248 million Euro in 2014.

The budget review was necessary due to the negative impact of the financial crisis. Unemployment is still on the rise. Many office buildings remain empty; there are many more houses on the market, and there is a drop in the number of tourists visiting Amsterdam.

Menu of budget-cutting options

The current Municipal Executive will not make any of the budget cuts itself. That’s a task for he new board to be formed after next month’s municipal elections.

Instead the current board has included an inventarization list with its report — a menu card of possibilities politicians can choose from in order to achieve the budget cuts.

That said, some of the measures have already been set in motion. Among them is the reduction of the municipal organization by cutting 500 to 800 civil servant jobs over the next four years. The city hopes a hiring freeze combined with a natural turnover will make forced dismissals unnecessary.

Money Pit

Stopping construction of the problem-plagued North-South metro line is not an option, the report says, as doing so would be more expensive than continuing the project.

Impact on Tourism

Like many other municipalities in the Netherlands, Amsterdam levies a tourist tax — wich currently amounts to 5 percent of your nightly hotel room rate. This tax is paid by the hotel operator, but one way or another the tourist ends up funding it.

The authors of the budget review say it is possible to raise this tax, and state that a one-time increase by 20 percent would result in a yearly revenue of 4.8 million Euro. They kindly add that “another percentage is possible as well, with revenue increases accordingly.”

If and when the new Municipal Executive board decides to exercise the option to raise the tourist tax you’ll read about it here on DutchAmsterdam.nl.
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