5.1.2 Division of jurisdiction
The Finnish cultural policy system evolves along the state-municipalities axis. The constitution and legislation on municipal administration defines the role of the municipalities' vis-à-vis the state.
Despite the autonomy of the municipalities (which includes e.g. the right to income taxation), local cultural institutions are to a large extent dependant on central government subsidies (transfers). These subsidies, aiming at equity in the regional and local provision of performing arts and cultural services, go either to municipalities and through municipalities to the municipal cultural institutions and activities, or directly to cultural and art institutions which are operated as non-profit organisations (usually as associations or foundations). In the former case, it is up to the municipalities to decide to what extent they use the subsidies along with their own funds to promote the arts and cultural activities.
Alongside the Constitution, the key pieces of legislation on the jurisdictional division between the state and municipalities and in the cultural sector are:
Act on Municipalities (365/1995), which defines the basic principles of local self-government, and administration and the relations between central government (the state) and local self-government. The latest main amendment (1375/2007) affirms the central position of the Ministry of Finance in monitoring municipal activities and the municipal economy. The amendment also stipulates the budgeting principles and procedures to be used in funding basic public service programmes financed jointly by the state and the municipalities.
The Act on Central Government Transfers to Municipal Basic Services (1704/2009) is a general financing law which defines the relative share of the state and municipalities in financing basic public services and the rules for calculating the amount of transfers (state subsidies) from the state to municipalities. The Act annuls the earlier 1996 Act and is a part of the process where the role and mandate of the Ministry of Finance to monitor and plan the coordination of the economies of central and municipal government was strengthened. Only three categories of cultural services, public library services, provision of non-institutional cultural services and extracurricular art education are considered basic public services. The subsidising of theatres, orchestras and museums have, alongside some educational services, their own subsidy legislation defined in the Act on Financing Education and Culture.