What do residents get for the money, and who pays for whom?
Short answer: Municipalities spent 69,557 kronor per resident net in 2025, most of it on schools and care. Equalisation moves money from eleven high income municipalities to all the others.
Which municipalities are losing residents and how far residents have to services is on Rural and urban. Procurement and the corruption risks in the municipalities are covered on Corruption and procurement. What municipalities spend on libraries, arts schools and sports halls is shown on Culture and sport.
Tax, government grants and fees.
The municipality's own income per resident, at the money value chosen at the top. The tax rate is the municipality's and the region's together, without church and burial fees. General government grants and equalisation is the sum of everything the municipality receives and pays in the equalisation system, see further down.
Where the money goes.
Net cost is what a service costs after fees and targeted grants, that is what tax and equalisation pay for. Kronor per resident at the money value chosen at the top. A municipality with many children or many old people naturally spends more on school or care.
Cost per pupil and care recipient, and the cost level.
Cost per pupil, child or care recipient in kronor per year, at the money value chosen at the top. The cost level compares what the municipality spends with what it would be expected to spend given its structure, according to cost equalisation: plus means more expensive than the structure explains, minus cheaper. Spending more does not mean better service. A few values are odd, such as home care in Linköping, where the municipality reports differently.
What municipalities build and borrow.
Kronor per resident at the money value chosen at the top, the municipality's own administration without municipal companies. Debt can jump in a year when the municipality takes over its companies' loans in an internal bank. School investment looks low where a municipal company owns the school buildings.
Surplus, deficit and equity ratio.
A result of around two percent of tax and grants is usually seen as sound financial management. The balanced budget requirement says the municipality may not run a deficit, adjusted for capital gains and similar items. The equity ratio is how much of the assets is paid for with own money. Including all pension liabilities also counts pensions earned before 1998, and then several municipalities have a negative equity ratio.
Who pays for whom.
Kronor per resident in the money value chosen at the top. Plus is money the municipality receives, minus money it pays in. Income equalisation gives municipalities with low tax income a grant up to 115 percent of the average income, and those above pay a charge. Cost equalisation moves money between municipalities by how expensive their structure is, such as age, sparse population and children, without government money. The adjustment item balances the system against the government appropriation.
Mergers, debt and tax.
Taken together, the municipalities ran a surplus of SEK 32 billion in 2025, better than the year before. But the differences are large. 38 municipalities ran a deficit, and most of them had fewer than 11,000 inhabitants. What is putting pressure on municipalities now is demographics. Very few children are being born and the number of older people is growing. Since 2021, nearly 500 municipal preschool units have closed, largely because cohorts of children have shrunk. At the same time, municipalities are investing heavily and their debts are growing.
In 2020 the Municipal Inquiry estimated that 21 of Sweden's 290 municipalities would have fewer than 5,000 inhabitants in 2040, against 15 in 2018. The inquiry did not want to force mergers, since they should be voluntary. Instead it proposed that the state take over debts from municipalities that merge voluntarily. It also identified an obstacle: municipalities that merge can lose grants in the equalisation system.
Neighbouring countries have made bigger changes. In 2007 Denmark merged 271 municipalities into 98 and replaced 14 counties (amter) with five regions. Norway’s municipal reform of 2020 cut the number of municipalities from just over 420 to 356. Finland kept its municipalities but in 2023 moved health care, social services and rescue services to new wellbeing services counties, funded mainly by the state. Iceland has halved its number of municipalities since 2000 through voluntary referendums.
Municipalities in the Nordic countries
| Country | Number of municipalities | Average inhabitants per municipality, 2025 | Local government expenditure, share of GDP 2024 | Municipalities' main own taxes |
|---|---|---|---|---|
| Sweden | 290 | 36,500 | 25.6 per cent, including the regions | Municipal income tax, plus revenue from the municipal property fee |
| Denmark | 98 since 2007, previously 271 | 61,200 | 30.5 per cent, including the regions | Municipal income tax and tax on land and property |
| Finland | 308 year 2025 | 18,300 | 23.7 per cent, including the wellbeing services counties | Municipal income tax and property tax |
| Norway | 357 since 2024 | 15,700 | 15.5 per cent, including the county municipalities (fylkeskommuner) | A share of income tax up to a ceiling set by the Storting, and property tax |
| Iceland | 62 year 2025 | 6,300 | 14.0 percent | Municipal income tax within a range set by law, and property tax |
Sources: Eurostat (population on 1 January 2025 and total local government expenditure as a share of GDP), Statistics Denmark, Statistics Finland, Store norske leksikon, Statistics Iceland (Hagstofa Íslands) and the OECD and UCLG country profiles on local government finances. The average is population divided by the number of municipalities. Countries assign different tasks to their municipalities. In Sweden and Denmark the regions run health care, and in Finland the wellbeing services counties have done so since 2023, and Eurostat counts them in the same sector as the municipalities. The shares are therefore only roughly comparable.
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Does it get cheaper when municipalities merge?
Usually not. After the Danish reform of 2007, the merged municipalities saved on some things, but other costs rose just as much. For most services, size made no difference. The Swedish Municipal Inquiry’s own calculations for Swedish conditions also showed only small savings.
Blom-Hansen, Houlberg, Serritzlew and Treisman (2016), American Political Science Review. Municipal Inquiry, SOU 2020:8.
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Do municipalities take on debt before a merger?
Yes. Swedish municipalities that knew they were going to be merged borrowed more in the years before, since the debt would then be shared with the residents of neighbouring municipalities. This shows up both in the 1952 reform and in the reform around 1970. So how debts are handled matters when municipalities merge.
Jordahl and Liang (2010), Public Choice. Hinnerich (2009), Journal of Public Economics.
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Are small municipalities more expensive per resident?
Often, according to SKR. Small, sparsely populated municipalities with shrinking populations systematically have higher tax rates than others. The surplus in 2025 came mainly from the larger municipalities, and most of the 38 municipalities with a deficit had fewer than 11,000 inhabitants.
Municipal Inquiry, SOU 2020:8. SKR, Economic Report October 2025 and May 2026.
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Do residents get more out of a higher tax?
They have more money to work with, but it goes mostly to what municipalities are required to do by law. The 15 municipalities with the highest tax rates charge on average 5.20 kronor more per SEK 100 than the 15 with the lowest. They have 36 per cent more revenue per inhabitant. The extra cost lies mostly in elderly care and compulsory schooling, not in voluntary services. SKR cannot say whether the difference is down to efficiency, ambition or the municipality’s circumstances.
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Do more state grants lead to lower taxes?
No. When Swedish municipalities received more in general state grants they increased their spending, but they did not lower taxes. Economists call this the flypaper effect, because the money sticks where it lands.
Dahlberg, Mörk, Rattsø and Ågren (2008), Journal of Public Economics.
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Can the equalisation system hold back mergers?
Yes, according to the Municipal Inquiry. Municipalities that merge can lose grants in the municipal equalisation system, which is an obstacle to mergers. The inquiry therefore wanted the whole system reviewed.
Municipal Inquiry, SOU 2020:8.
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Does it matter which parties are in power?
A little. In Swedish municipalities where the left bloc narrowly won a majority, spending and taxes were 2 to 3 percent higher than where the right bloc narrowly won. Unemployment was about 7 percent lower, partly because the municipality itself hired more people. The study covers the years 1974 to 1994.
Pettersson-Lidbom (2008), Journal of the European Economic Association.
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Does it get cheaper when there are fewer children?
Not directly. Two in three municipalities have cut their preschool costs. Even so, the cost per enrolled child rose by just under 1 percent in fixed prices in 2024, and premises costs per child rose by 4.5 percent in fixed prices. Premises cannot be adjusted as quickly as the service itself. At the same time, revenues fall as the population shrinks, and elderly care needs to grow.
SKR, Economic Report October 2025 and May 2026.
Where the figures come from.
- Statistics Sweden, municipal accounts (OE0107): net cost per service, income, investment, debt and interest, cost per pupil and care recipient.
- Statistics Sweden, municipal equalisation (OE0115): every part of equalisation per municipality and year.
- SCB, municipal tax rates (OE0101): the tax rate per municipality 1974 to 1994 and for the country since 1930.
- Source: Kolada. Tax rate, result, balanced budget result, equity ratio, self-financing and cost level.
- Where a series changes source or definition, a dashed vertical line marks it in the chart and the line breaks. Years before 2011 come from older SCB tables, equalisation before 2005 from the old system.
- Own calculation: the median municipality is the median of all municipalities that year, calculated by us. It is shown where a national figure is missing.
The municipalities' annual reports are not included here but are summarised on every municipality page. What the state spends on municipalities is on the state budget, and the same figures are the map layers Municipal money and Equalisation between municipalities on the map.