Minister: No new scope despite additional tax revenue
According to Finance Minister Katrin Lange, the expected additional tax revenue for Brandenburg cannot be used to demand more spending. The bottom line is that the additional revenue could be used to close gaps in coverage in the coming years. However, the SPD politician warned against too much optimism: "This will not create any new scope for spending," said Lange on Tuesday in Potsdam. "For 2025 and 2026, even according to the current tax estimate, there are still considerable gaps in coverage that still need to be closed."
Compared to the adopted 2023/2024 budget, which is based on the tax estimate from October 2022, there will be additional revenue of around 288 million euros for this year and around 254 million euros for the coming year before taking the municipal financial equalization into account. According to the Finance Minister, the state's revenue will increase by around 177 million euros this year compared to 2022 to around 11.4 billion euros. In 2024, revenue is expected to rise to around 11.9 billion euros - almost half a billion more than in the previous year.
For 2025, the tax estimate - compared to the previous financial planning - showed additional revenue of around 546 million euros and 588 million euros for 2026. According to Lange, the tax estimate is no relief for the state budget due to global under-spending - a kind of across-the-board cut in the budget - for 2023 and 2024 as well as high coverage gaps of around 1.3 billion euros for 2025 and 1.5 billion euros for 2026.
The minister also warned against misinterpretation. "The improved expectations for Brandenburg are primarily the result of higher payments from the delayed settlement system of the financial equalization scheme," said Lange. The current estimate also shows that Germany's economic development is still weak this year. Part of the higher expected tax revenue is also due to inflation. On the other hand, the state will have to pay more for construction services or for higher salaries for employees.
According to the ministry, the tax revenue of Brandenburg's municipalities is expected to increase from around 2.7 billion euros this year to around 3.4 billion euros in 2028. Added to this are the effects of the municipal financial equalization scheme.
Despite the additional tax revenue, Finance Minister Lange emphasized that it won't create any new spending opportunities, as there are still significant funding gaps for 2025 and 2026 that need to be addressed, even with the expected revenues from taxes. Furthermore, the minister highlighted that any improvement in Brandenburg's financial situation mainly stems from higher payments from the delayed settlement system of the financial equalization scheme and the impact of inflation, but it also means higher expenses for construction services and employee salaries.
Source: www.dpa.com
