Despite many imponderables, Bavaria’s Finance Minister Albert Füracker (CSU) is banking on a budget without new borrowing in the coming year. “It is my declared goal to have a budget without new debts in 2023,” said the CSU politician on Friday at the presentation of the May tax estimate in Nuremberg. Hope that the goal can be reached should also give him the prospect of significantly increasing tax revenue – by 2024 the forecasts predict a big plus of more than six billion euros.
After Bavaria had to finance some of its expenses with new loans since 2020 due to the Corona crisis, a budget must now be presented “as soon as possible” that is supported solely by the income. To deal with the consequences of the pandemic, the state parliament had approved credit authorizations of 20 billion euros. According to Füracker, 10.1 billion euros of this have been exhausted so far. Bavaria is currently in debt with around 37 billion euros. “Getting into debt is always the ultima ratio.”
The May tax estimate is an important indicator for the 2023 budget that has already begun. The forecast predicts a big plus of 1.9 billion euros for 2022. For 2023 (2.4 billion euros) and 2024 (2.2 billion euros), there will be more than four and a half billion euros in additional tax revenue for the Free State compared to the estimate from November 2021. “But we have to take the results of the current tax estimate very seriously consider restraint,” stressed Füracker. “The Corona crisis has not yet been overcome and the cruel war of aggression against Ukraine presents us with currently unforeseeable challenges. We do not know how the war will develop and what effects it will have on our economy.” He prefers the money to be in the account rather than an estimate. “We must not plan this money.”
The significant increase in the tax forecast is primarily due to the development of income in 2021, which was far above expectations, and the high nominal economic growth forecast for 2022 and 2023, which is also due to inflation. According to the estimates, tax revenue is on a stable recovery course. Nevertheless, Füracker warned against expectations that were too high: “The numbers seem far too optimistic.” Despite the forecast, he sees no room for additional new spending. Because of the Ukraine, the global uncertainties for the economy, the expensive energy costs and the unforeseeable development due to Corona from autumn onwards, the crisis management will remain. He also appealed to his own party friends and the government not to use the forecast income for expenditure. The money can only be spent once it is in the account.
Tim Pargent, financial policy spokesman for the Greens in the state parliament, sees it differently: “We can really use such additional income: for the urgently needed climate protection, for more social justice and for the long-overdue infrastructure investments. But one thing should hopefully be clear to everyone: New Söder Despite a positive tax estimate, Bavaria can no longer afford election gifts.”