The state government will increase the financial equalization for Bavaria’s municipalities next year to 11.3 billion euros; this is an increase of 7.2 percent compared to this year. Although the budget situation is “remains extremely tight”, this “top result” in municipal financial equalization for 2023 significantly exceeds the previous year’s figure, it said at the weekend about the negotiations between the government and the central associations of cities, municipalities, counties and districts.
This creates “the necessary planning security and an additional boost for important future investments,” said Finance Minister Albert Füracker (CSU): “The Free State of Bavaria remains a secure anchor for the Bavarian municipalities.” The chairman of the city council and chief negotiator for the municipal associations, Straubing’s mayor Markus Pannermayr (CSU), spoke of a “viable compromise” that was “a contribution to stabilizing municipal budgets in times of increasing spending obligations”. In addition, it was possible to receive funding for the construction of schools and day-care centers at a high level.
Nevertheless, Pannermayr warned that districts, cities and municipalities are faced with difficult budgetary consultations because of the foreseeable cost increases. The municipalities had previously demanded more money out of concerns about deficits and skyrocketing costs in local transport, in clinics, public utilities or in migration. Municipal council president Uwe Brandl (CSU), mayor of Abensberg in Lower Bavaria, summarized the result as follows: “A result that is due to the extraordinary circumstances and can only therefore be supported by the Bavarian municipal council, taking into account the necessary solidarity.”
The state government is significantly increasing the funds for municipal building construction, which, according to Füracker’s announcement, will increase by 350 million euros to a good one billion euros. The background is the exploding construction costs, which make it increasingly difficult to implement planned projects. The lion’s share of financial equalization is made up of the so-called key allocations – largely “free funds” for the municipalities – which increase by 267 million to just under 4.3 billion euros.
Among other things, the funds for hospital financing (643 million euros) remain at the previous year’s level. Interior Minister Joachim Herrmann (CSU) assured the municipalities that the state government would not leave them alone when it came to the costs of accommodating refugees. “We want to push for a limit on the access of refugees, but it is important that those who come to us are housed and cared for in any case.” Economics Minister Hubert Aiwanger (Free Voters) warned of a “huge budgetary risk for the Free State of Bavaria” in connection with a possible gas supply crisis in the economy.
The Ministry of Finance is currently working on the first conceptual design for the Bavarian state budget. There will again be a one-year budget. Füracker had already recently referred to the many challenges and an “enormous financial effort” with a view to planning for 2023. “The federal government’s patchwork” with relief packages is also to blame for this. His house wants to wait for the autumn tax estimate and then present the draft. In the budget for the current year with a volume of 71.1 billion euros, 5.8 billion euros in debt are included and, in addition, a handle in the reserve. In 2020, the state parliament had opened up a possible credit line of up to 20 billion euros to deal with the corona pandemic and its consequences, which had not been fully exhausted. Füracker used this credit authorization in 2022, and the money went to the “High-Tech Agenda Plus” for research, among other things.
The first tax estimate in May was indeed positive, but there was a high risk of forecasting, as it was said at the time: “We don’t have the money in our accounts yet.” The second estimate is now expected in the near future, according to which a budget draft in the cabinet and state parliament should take off, possibly by the beginning of November. The final decision on the budget is therefore likely to be well into the coming year. The Greens faction had complained about the schedule a few weeks ago, saying that the budget was coming “much too late”, which prevented planning security. CSU and FW “throw around with demands for Berlin and have completely stopped their work for the Free State of Bavaria,” etched the green parliamentary group leader Ludwig Hartmann. Füracker replied that the line-up was “absolutely in sync” with last year, and that this had proven itself. You act “well thought out and not hectic” and can also efficiently include the latest developments.