- Audit Authority Identifies Violations in Proposed Red-Green Budget Draft
The Hamburg Audit Office has called out the red-blue-green Senate for disregarding budgetary essentials with their broad-sweeping reductions in expenditure proposals for the 2025/2026 double budget. The proposed total reductions of 2.5% are deemed excessive, especially given the budget's generally favorable state, noted Philipp Häfner, Vice President of the Audit Office.
The suggested global savings targets, which call for authorities to save a certain percentage across the year, is a contentious issue in the Senate's draft. This draft, which represents a historical spending level of around 44 billion euros for the following two years, equates to approximately 500 million euros in annual savings.
According to the auditors, the legal maximum for reductions is 2%, except in circumstances like the corona pandemic, where exceptions are acceptable. The Senate disagrees, as they expressed their intention to revert back to 2% two years ago, said Häfner, concluding that "target not met."
The Audit Office perceives dangers in the planned spending on social services, rental costs, and personnel. The Senate must ensure that basic administrative tasks can continue to be carried out, as stated.
"Only when these necessary tasks and administrative fundamentals are secure, can politically desirable objectives be pursued," suggested outgoing Audit Office President Stefan Schulz.
"This doesn't make sense"
The Senate's approach to cost reductions in the legal services sector within the social sector fails to take into account anticipated cost increases per service, according to Häfner. "This doesn't make sense. We fear there's not been enough budget assigned."
Regarding the tenant-landlord scenario, where the Senate sells buildings to the city-owned Sprinkenhof before re-renting them back, rent increases will only occur later due to maintenance and renovation costs. "There's risk of an iceberg which we're unaware of," warned Häfner, recommending the creation of a cost increase overview and inclusion in the financial report.
High costs due to municipal participations
The Audit Office also sees issues in the Senate's plan to withdraw 25 million euros from the profit reserve of the Landesbetrieb Immobilien und Grundvermögen (LIG) and allocate it to the budget. While this is typically acceptable, pointed out Häfner, the LIG's heavy losses necessitate fresh capital injections.
Furthermore, the Audit Office highlights elevated costs at the HVV, which are also likely to impact future budgets. A yearly loss of around 400 million euros is projected, mainly due to the Germany ticket.
Goals of the Senate
With its extensive budget proposal, the Senate is currently expanding its budgeting policies compared to the budgetary situation, deemed acceptable by Häfner. However, this could change quickly. "The Senate and Parliament must be prepared to change gears," he warned.
The Senate will present its draft budget to the city parliament this week, with plans for record investments of around six billion euros over the next two years, focusing on areas such as education and research, internal security, housing construction, mobility, and climate protection. The budget is expected to be passed by year's end.
The opposition and the Taxpayers' Association back their criticism.
The criticism from the Audit Office has found support amongst the opposition in the city parliament, particularly with regard to the global under-spending.
The budget spokesperson of the CDU group, Thilo Kleibauer, accused the Senate of exceeding acceptable limits with the global reductions. "This represents misuse of the global cost-saving instrument and constitutes a constitutional question." The red-green coalition is now required to "present a transparent budget plan without accounting tricks, instead of undermining parliamentary budget rights with blanket positions."
Budget Expert of the Left: Red-Green Crocodile Tears
In the past, the blanket cut provisions have led to "positions remaining unfilled, which are essential for an efficient city," observed the budget expert of the Left, David Stoop. "And then the red-green lament again about the tax office's insufficient checks, unfilled positions in schools, and the inability of district offices to keep up with housing benefit and building permit processing."
The Federation of Taxpayers also sees its criticism confirmed. "Despite consistently high revenues, an adjustment is inevitable," underscored the Hamburg state chairman, Sascha Mummenhoff. "We demand more self-criticism and transparency in the allocation of tax revenue to ensure Hamburg's financial stability in the future."
The Audit Office has raised concerns about the Senate's decision to consult the Court of Auditors before implementing the proposed 2% reductions, given the legal maximum is only 2% except in exceptional circumstances. The Senate is expected to discuss the budget with the Court of Auditors in the near future.
