Massive financial discrepancy emerges during the early stages of budget talks.

Magdeburg: New Housing Project Launches - Massive financial discrepancy emerges during the early stages of budget talks.

The state government of Saxony-Anhalt will kick off discussions regarding the budget for 2025/2026 starting from next week. The ministers will participate in a budget planning meeting. The current forecasts show that the total budget requirements surpass the available funds by more than three billion Euros, as per dpa reports. Within the black-red-yellow coalition, it's expected that there will be a tough battle to achieve a balanced budget.

Finance Minister Michael Richter declined to offer specifics on the issue as of now. He merely acknowledged that the departmental requests far exceed the available revenue. When questioned by the German Press Agency, Richter, a CDU politician, stated, "we'll determine within the cabinet how to handle the various requirements for the budget."

The government plans to establish a budget for the next two years to accommodate the Landtag elections in 2026. Due to a more recent estimate, the state of Sachsen-Anhalt may have to deal with fewer tax revenues than initially expected for this duration. The previously estimated budget volume for that period was around 14 billion Euros per year.

The Finance Minister urges an examination of priorities:

"It's essential to ask ourselves: What can we still afford? That needs to be determined," Richter said. "We must ascertain what we can agree on and where we can't. The public needs to be made aware of this. They tend to be more understanding than typically assumed." However, Richter is not in charge of selecting the focus areas. "The departments must determine that for themselves."

There's a possibility that the controversial 'global reduction' method will be implemented in the budget. This entails outlining more expenses than revenue, which are then reduced to match the expected funds (exact amount undefined). It's been observed that not all positions have been filled and not all investment funds utilized in recent years. Richter has yet to reveal the extent of this measure. Nonetheless, the Minister was resolute: "Without global reduction, it won't work."

SPD faction warns against drastic cuts:

Once the Landesregierung endorses the budget draft, it heads to parliament. The legislators hold the final say. CDU deputy leader Guido Heuer has a clear stance. "The Landtag has decided that the global reduction should not exceed 1 percent," he said. He expects the state government to "do everything it can to keep that to a minimum - even though I also understand that there's a revenue shortfall that doesn't help much."

"We must save," also expressed FDP faction leader Andreas Silbersack. "For us, the debt brake remains in effect." That won't change. "We know that the finance minister's funds are not unlimited and that he anticipates less for this budget than more. Therefore, we'll scrutinize how restrictive we'll need to be overall."

The third coalition partner SPD advises against making too many cuts. "The message 'money is tight, so we'll shrink the welfare state' is not an option for us as Social Democrats. Not because we're social romantics, but because in times of uncertainty, adding extra uncertainty can only result in disaster," said Fraktionsvorsitzende Katja Pähle. "We all know that this won't be easy given tax evasion. We'll debate various projects within the coalition and argue for healthcare, for the expansion of renewable energies, for quality education."

Read also:

1. The state election in Saxony-Anhalt is approaching in 2026, and the current budget needs of the state government exceed their available funds by over three billion Euros.
2. Finance Minister Michael Richter, a member of the CDU, has acknowledged that departmental requests exceed the available revenue and will discuss how to handle these requirements within the cabinet.
3. The SPD factions warn against drastic cuts in the budget and advocate for maintaining funding for healthcare, the expansion of renewable energies, and quality education.
4. During the state election campaign, both the CDU and the SPD will have to address the 'billion-euro gap' and propose ways to balance the budget without compromising crucial government services.
5. The Household budget of many Saxony-Anhalt citizens may also be affected by the state government's budget cuts, as they rely on services funded by the state government, such as education and healthcare.
6. Michael Richter, the Finance Minister, has yet to disclose the extent of the 'global reduction' method, a potential solution to fill the financial gap by outlining more expenses than revenue and then reducing them to match the available funds.

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