Municipalities - Financial equalization 2024: search for a compromise
Under pressure from tight budgets, the state government and leading associations must reach a compromise on the municipal financial equalization for 2024. The top-level talks at the Ministry of Finance (10.00 a.m.) are taking place under difficult conditions compared to previous years: The cities and municipalities are demanding more money from the Free State due to the general inflation rate, high energy and personnel costs and new tasks such as climate protection. However, the state budget is also suffering from declining revenues and rising expenditure.
Finance Minister Albert Füracker (CSU) had therefore already warned against exaggerated expectations before the decisive negotiations: "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." There is therefore "much less leeway in the state budget than is always believed".
In recent weeks and months, representatives of the local authority umbrella associations have repeatedly insisted on an increase in financial equalization and otherwise warned of severe cuts to local authority services. They justified this with high inflation, personnel costs and additional challenges, such as climate protection.
Füracker appealed to all participants in the negotiations to find compromises: "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 addition to the heads of the Association of Cities, the Association of Counties, the Association of Municipalities and the District Assembly as well as 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), are also taking part in the talks.
The Free State uses financial equalization to support the municipalities - local authorities, administrative districts and boroughs - so that they can carry out a variety of tasks in their respective territories in the interests of their citizens. The volume of financial equalization has risen steadily and sharply in recent years. While it amounted to around 8.9 billion euros in 2017, it was already 11.16 billion euros in 2023.
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- Despite the demands from municipalities, Finance Minister Albert Füracker (CSU) highlighted the constraints on the state budget due to rising costs and inflation.
- The Association of Municipalities and other local authority umbrella associations have repeatedly pressed for an increase in financial equalization, citing high inflation, personnel costs, and additional challenges like climate protection.
- The state government, led by the CSU, will be in negotiations with these umbrella associations to reach a compromise on the municipal financial equalization for 2024.
- Interior Minister Joachim Herrmann (CSU), Economics Minister Hubert Aiwanger (Freie Wähler), and Josef Zellmeier (CSU), the Chairman of the Budget Committee in the state parliament, are also joining these negotiations.
- The CSU-led State government uses financial equalization to support municipalities, including local authorities, administrative districts, and boroughs, in fulfilling their tasks and serving their citizens' interests.
- With financially strained municipalities demanding more funds and the state budget under pressure, finding compromises in these talks will be crucial for maintaining essential services in Bavaria.
- The BMF (Ministry of Finance) in Munich will be hosting these high-stakes talks, aiming to reach a consensus with the umbrella organizations to address the challenges facing municipal finances in Bavaria.
Source: www.stern.de
