Budget approved by the local council

You can access here: Mýrdalshrepp's financial plan for the years 2023-2026 and a report with the plan.

There was ongoing uncertainty about the municipality's finances at Mýrdalshreppur after the spread of the corona virus pandemic. There is no need to elaborate on the impact of the epidemic on business life in the municipality, which was almost entirely dormant for months between 2020-2021. The response from tourism after the lifting of the restrictions on gatherings has been expeditious. A large number of tourists have visited Iceland, and tourism in the municipality flourished in 2022. Increased activity results in increased income in the form of local taxes to the municipality, and therefore, its financial position at the end of 2022 is very good.

Extensive construction and investments are planned in the 2023-2026 budget. The biggest projects are:


  • New kindergarten
  • New fitness/training
  • A viewing platform in Reynisfjall
  • Street, sidewalk and path constructions
  • Exterior repairs at Leikskálar
  • New heat pump for swimming pool


  • New fire station and maintenance house
  • Completion of kindergarten


  • New nursing home
  • Investment in sewage solutions


  • A school extension


Strategic planning work in environmental matters is planned for the municipality in 2023. The result of that work may call for investments in infrastructure due to changes in the garbage collection system. Prerequisites for assessing the extent of that investment are not available until the previous strategic planning.
Mýrdalshreppur's financial situation is good and the municipality is in a good position to start infrastructure investments. However, it is important to take into account when planning for the long term that the burden of services for residents in the municipality may increase significantly compared to what it is now, as the number of children in school increases and the level of services increases. Salary costs and other operating costs of maintaining services can thus rise significantly and reduce scope for investment.

Key outcomes of Budget 2023:

  • The operating result of parts A and B is positive by 162,8 m.kr.
  • Debt ratio will be 90.4% at the end of 2023
  • Working capital from operations will be 243,7 million (23.3%)
  • Estimated investments in fixed assets totaling 723 m.kr.
  • The regional percentage is unchanged from what it has been, 14.48%
  • The levy of real estate taxes changes so that the levy in class A (residential property) drops from 0.39% to 0.33%. The levy in class B and C is unchanged
  • In general, a 5.5% increase was considered for other tariffs in part A


The total revenue for the year 2023 is estimated at 1062 million. and total expenses 788 m.kr. Capital costs are estimated at 46,6 m.kr. and cash at the end of the year 84,6 m.kr
Although the corona virus pandemic has largely paralyzed services in the general market, it was possible to maintain most of the municipality's services almost continuously. Special thanks must be given to the good work that school and nursing home staff were able to support and thus protect vulnerable groups. Mýrdalshreppur has strong human resources that have shown loyalty to their workplace in challenging times, and it is important to ensure that there are opportunities for professional development while looking for ways to attract qualified staff to new positions.

The population of Mýrdalshrepp has increased rapidly over the past ten years, with corresponding pressure on the housing market, and the development has completely changed the municipality's finances. It is the local government's policy to plan infrastructure investments in such a way that the number of new residents continues and that the municipality continues to grow. In order for this to happen, it is important to pay special attention to the availability of service plots so that new employment opportunities can attract more residents. The 2023 budget provides for the zoning of new areas, e.g. by Sléttuvegar for service lots and east of Sléttuvegar for new residential areas and service lots.

Mýrdalshreppur is a multicultural community with the highest proportion of foreign residents known in Iceland. In an effort to promote the social participation of all residents of the municipality, an English-speaking council has been established. The purpose is to give foreign residents who are not native speakers of Icelandic the opportunity to influence their local community in a formal way. The administration system of the municipality underwent considerable changes following the elections in the spring of 2022, when the committees that had been in operation were abolished and merged into two larger committees with a wider scope of work; Planning and Environment Council and Family, Leisure and Culture Council. The intention is to prevent certain issues from becoming orphans within the administration due to inactive committee work.

If the organized effort to build infrastructure that ensures good services to residents and attracts more new ones is successful, it is the undersigned's opinion that Mýrdalshreppur will continue to grow and become a popular place for tourists to visit and people in general to stablish here. The financial plan that is presented here reflects that there is no mistake that the aforementioned is aimed at in a purposeful and responsible manner.


December 14, 2022
Einar Freyr Elínarson, mayor of Mýrdalshreppur