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In 2022, the city will probably be in the chalk with 462 million euros. That is 50 million more than today. The main reasons are theater renovation and schools.
FromStefan Krog
The city’s debt will rise by more than 50 million euros in the next two years and will reach a record level of 461.8 million euros in 2022. The background to this is that the city will have to take out a loan of around 50 million euros in 2022 to cover the additional costs for the theater renovation. The city will also take out around 28 million euros in special loans for the renovation of schools in the next two years – this will increase the mountain of debt.
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According to the Bundesbank, banks could become more restrictive when it comes to lending as a result of the corona crisis.
Image: Monika Skolimowska, dpa (symbol picture)
However, the city wants to pay off past loans to a similar extent, so that the mountain of debt as a whole does not become higher. The additional debt had already been announced, but for the first time there are figures in black and white.
Finance officer Roland Barth will present the 2021/22 double budget to the city council next week. Debate is not to be expected for the time being. The political exchange of blows is likely to take place in December, when all parliamentary groups have familiarized themselves with the more than 1,700-page documents and the financial consultations begin. The social faction, as the largest opposition faction, had already made it clear in the summer when adopting the additional theater renovation costs that it was rejecting new debt in view of the Corona crisis and the challenges of school renovation.
Money for the Rudolf-Diesel-Gymnasium is planned
Probably also to smooth things over, Barth has earmarked around 1.6 million euros in planning funds in the upcoming budget for 2022 for the continuation of the renovation of the Rudolf Diesel Gymnasium. Originally, the city had wanted to postpone the continuation due to a lack of money, which also caused protests.
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The renovation of the Rudolf-Diesel-Gymnasium should continue.
Image: Silvio Wyszengrad (archive photo)
As reported, the renovation of the theater will cost between 283 and 321 million euros. The Free State will finance around half of it through subsidies. The framework decided in the summer has included increased construction costs and additional costs due to rescheduling for the new extension. With the additional borrowing planned for 2022, the city assumes that the total costs will level off in the middle of the corridor at 300 million euros. For the next 20 years, the city will have to repay loans of around 6.5 million euros annually.
Increase in debt by 50 percent in eight years
A public petition launched in October calls for an immediate halt to construction and planning at the theater in view of the cost explosion, especially since the end of the flagpole is presumably not yet attainable. The city counters, among other things, that the debts only materialized hidden deficits in the infrastructure. The loans are cheap in view of the low interest rates, while at the same time securing such high funding amounts
Augsburg. The city’s debt was 303 million euros in 2014, jumped to 407 million euros in 2017 due to the start of the theater renovation and will be 461 million euros in 2022 – this corresponds to an increase of around 50 percent in eight years.
How much are Augsburg’s debts?
Augsburg’s debts increased during Kurt Gribl’s tenure. The increase from 2011 is due to special projects such as the renovation of the congress hall, the jump from 2017 to the loans for theater and school renovation. The opposition criticized the rise in debt, the city government argued that this would provide funding and increase the city’s wealth as a whole. The debt history of the city of Augsburg indicates the debt level at the end of each year.
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Apart from the topics of theater and school renovations, the budget for the next two years will be dominated by the corona pandemic. “The situation is unprecedented and cannot be compared with the bottlenecks in the local budget situation that have been experienced so far. The effects of the pandemic are only gradually becoming apparent,” says the finance department’s report. Overall, the city assumes that it has significantly less money at its disposal than in previous years. Much is still uncertain, according to Barth, such as the development of the trade tax as one of the most important sources of income.
Numerous investments in Augsburg are canceled
As reported, the city had cut its investments for the current year so low that a surplus of around 20 million euros remains. That worked because the state gave the municipalities a lot of support. This cushion, albeit not particularly thick, should help the city to survive the next two years. Unlike this year, there are no state compensations for the discontinuation of trade tax. As reported, the city had recently pushed several projects that would have been financed over several years. These include the renovation of the Dominican Church (four years), the next section of the city wall renovation Lueginsland (one year) or the redesign of the square near St. Michael (three years). Other projects such as the renovation of Fuggerstrasse were already started a year ago in view of the deteriorating economic situation (
Corona was not yet an issue) already postponed to the distant future. Money is provided for the completion of the two forecourt at the main station.
In total, the city will probably earn and spend 1.18 billion euros in the coming year, in 2022 it will probably be 1.25 billion euros. The majority is accounted for by running costs such as personnel and social expenses.
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