Minister of Finance - Füracker dampens expectations for municipal financial equalization
Ahead of the decisive negotiations on the 2024 municipal financial equalization scheme, Bavaria's Finance Minister Albert Füracker has warned the leading associations against exaggerated expectations. "The state budget is also struggling with rising costs for personnel and energy, among other things, as well as high inflation - and that with currently declining tax revenues," the CSU politician told the German Press Agency in Munich. There is therefore "much less leeway in the state budget than is always believed".
According to Füracker, around 39 percent of the 71 billion in the current year's budget are fixed personnel costs and almost 29 percent go to the municipalities in various ways. Nonetheless, it was still possible to conclude a very good municipal budget with more than eleven billion euros by mutual agreement last year. Together with other benefits, a total of around 20.2 billion euros went to the municipalities from the Bavarian state budget.
In any case, the state government is once again striving for a compromise that is good for both sides: "Our goal this year is once again to find a good agreement - we cordially invite the municipalities to do so. Only together can we overcome this difficult situation," said Füracker. "My goal is not to always just argue about who pays for something - it is much more important to me to first clarify what we really need, especially in times of tight budgets."
In recent weeks and months, representatives of the municipal umbrella organizations have repeatedly insisted on an increase in financial equalization and otherwise warned of severe cuts to municipal services. They justified this with high inflation, personnel costs and additional challenges, such as climate protection.
Füracker went on to say that the Free State of Bavaria and the municipalities lived a close partnership. "We support our municipalities at a very high level and much better than other federal states. This was particularly true during the pandemic, when we were prepared to take on almost four billion euros in debt for the benefit of local authorities."
On Thursday, the representatives of the Association of Cities, the Association of Counties, the Association of Municipalities and the Association of Districts will meet with Füracker, Interior Minister Joachim Herrmann(CSU), Economics Minister Hubert Aiwanger (Freie Wähler) and the Chairman of the Budget Committee in the state parliament, Josef Zellmeier (CSU), for top-level talks on the financial equalization for the coming year.
With the financial equalization, the Free State is helping the local authorities - municipalities, districts and counties - so that they can perform a variety of tasks in the interests of the citizens in their respective territories. The volume of financial equalization has risen steadily and sharply in recent years. While it was still around 8.9 billion euros in 2017, it already amounted to 11.16 billion euros in 2023.
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- Despite the challenges faced by the state budget due to rising costs, high inflation, and declining tax revenues, Finance Minister Füracker from Bavaria managed to conclude a good municipal budget last year with over eleven billion euros, allocated to municipalities through financial equalization and other benefits.
- Bavaria's Finance Minister Füracker has advised municipal associations not to have excessive expectations regarding the upcoming negotiations on the 2024 municipal financial equalization scheme, emphasizing that there is less financial leeway than one might believe due to various factors.
- The German Press Agency reported that Albert Füracker, representing the CSU, stated that around 39 percent of the current year's budget is allocated to fixed personnel costs, while just under 29 percent is distributed to municipalities in various ways.
- The meeting scheduled for Thursday between representatives from various municipal umbrella organizations, such as the Association of Cities, and Bavarian politicians, including Minister Füracker, seeks to find a mutually beneficial agreement on the financial equalization for the upcoming year.
- The financial equalization scheme, which has experienced a significant increase in funding in recent years, plays an essential role in enabling local authorities – municipalities, districts, and counties – to carry out their responsibilities and serve the needs of the citizens in their respective areas, as stated by Finance Minister Füracker.
Source: www.stern.de
