Total municipal sector expenditure and income Estimate for 2005 Social welfare and health care 50 % Salaries and wages 41 % (Current expenditure and investments) Tax revenues 47 % Social security funds and pensions 12 % Purchase of goods 10 % State grants 17 % Education and culture 26 % (Current expenditure and investments) Purchase of services 16 % Sales of goods and services 27 % Subsidies 6 % Other 20 % Loan costs 3 % (Current expenditure and investments) Investments 10 % Borrowing 6 % Financing and other expenditure 4 % Other expenditure 2 % Other revenues 3 % 15.3.2005/J. Turkkila/hp

Total municipal sector expenditure Estimate for 2005 (external expenditure) Total 30.5 billion euro 13-Jan-19

Total municipal sector income Estimate for 2005 (external income) Total 30.4 billion euro 13-Jan-19

Local government tax revenues and state grants 1) At 1995 prices, 1990=100 1) The state grants for 1990-2006 are not directly comparable. Their comparability is improved by subtracting the contributions paid by the municipalities to the Social Insurance Institution during 1990-96 and by adding certain state subsidies in the national accounts for 1997-06, e.g. employment subsidies and unit-price based funding contributions received by joint local authorities. The actual tax revenue development 2002-03 also depends on the recovery of VAT refunds to municipalities: revenue losses are compensated by reducing the municipalities’ share of revenue from taxes on corporate entities. 8.3.2005/J. Turkkila/hp

Municipal tax revenue 2003-2006, Billion EUR Year 2003 2004 2005** 2006** Cash based: Municipal income tax 11,84 11,93 12,44 12,92 Corporate income tax 1,00 1,06 1,15 1,18 Real property tax 0,66 0,68 0,71 0,81 Tax revenue 13,50 13,67 14,30 14,91 Change, % -4,0 1,3 4,6 4,3 150405A J. Turkkila/my