State budget - Fewer inhabitants - but higher income in Thuringia
Thuringia will receive more money in the state budget despite a population decline in the coming years. The Finance Ministry in Erfurt announced that there will be annual surpluses in revenue over the financial equalization between the Federal Government and the States amounting to 130 million Euro, according to a dpa inquiry. The Ministry spoke of a "census effect".
In the latest population census, it was found that there are approximately 2.1 million people living in the Free State, around 12,000 fewer than previously assumed by the authorities. The correction was therefore -0.6%. Despite this, Thuringia will receive more money, as the relative population share of the federal state in the German population is crucial for the allocation of funds.
Statistical effect in favor of Thuringia
According to the Ministry, the absolute population number is not the determining factor for the allocations, but the relative population share of the federal state in the German population. "Since the population in Thuringia has declined less than the population as a whole in the Federal Republic, the population share and Thuringia will therefore receive higher revenues in the future as a result of the census", explained a Ministry spokeswoman. The adjustment for the entire Federal Republic amounted to minus 1.7% of the previous population.
The Free State will now not only receive higher deductions in the financial equalization between the States, but also higher federal grants. Both areas summed up to the 130 million Euro per year. According to the rules, the corrected population numbers also have a retrospective effect on the state finances.
For 2022, the population corrected by the census must be taken into account to one third, for 2023 to two thirds. "When the final settlement of these equalization years will take place, this cannot be determined at the moment", said the spokeswoman.
- Due to the population decline in Thuringia being lower than the overall decrease in the Federal Republic, this Free State is anticipated to receive higher revenues in the future, according to the BMF's explanation.
- As a result of the population census, Thuringia will now receive more funds in the financial equalization between the Federal Government and the states, totaling 130 million Euro annually.
- Since the census revealed that Thuringia's population decline was less than the nationwide average, the BMF in Erfurt announced additional income for the household finances of the federal state.
- The fiscal impact of the census correction extends beyond the current year, with Thuringia receiving higher deductions and federal grants for the next two years, resulting in a total of 130 million Euro per year.
