Less trade tax, costs for protective clothing, no income from swimming pools. Municipalities are also affected by the corona crisis. What Rathuser expect in the region – and do.
The Bavarian City Day has also called for a rescue package for municipalities. Cities and communities are also facing financial difficulties as a result of the pandemic. Without help, the fear is that they could lose their ability to act. The Bavarian State Parliament reacted to the appeal by, among other things, deciding that the Free State would pay out funds from the municipal financial equalization earlier than usual. It is about two billion euros – so the liquidity of the municipalities should be preserved.
Greens wanted to provide the municipalities with a billion euros
The state government rejected the Greens’ proposal to provide the municipalities with additional aid amounting to one billion euros. How much money a municipality would have received according to the opposition party ‘s ideas should be calculated on the basis of the actual tax breaks on site: “We would have used the emergency aid to avoid the first reflex, to immediately impose budget freezes and to blow off important renovations or on the long put off, “said the budget spokeswoman for the Greens, Claudia Khler.
The Free State cannot compensate for all tax deficits in the municipalities and drive up its own debt, says the head of the Committee on Budgets, Josef Zellmeier (CSU). Instead, the municipalities have to be given more opportunities to take out loans themselves, said Zellmeier. After all, the Bavarian municipalities are financially the best in Germany for many years.
Take Schweinfurt, for example: trade tax has dropped massively
And yet the concern in the Rathusern is also great in Lower Franconia. “Almost all municipalities are threatened with severe revenue losses,” says Sebastian Remel (CSU), Lower Franconian chairman of the Bavarian City Council and Mayor of Schweinfurt. Two main sources of income for municipalities, income tax and trade tax, are at risk: “We are seeing a massive drop in trade tax,” says Remel. Some large companies reduced their tax payments to zero, and in some cases even repayments were required.
In terms of income tax, it will largely depend on whether the corona pandemic leads to higher unemployment. “At the same time, there is a lack of income from urban institutions,” said Remel, referring to closed museums, theaters and adult education centers. “Conversely, we also incur expenses, for example when wearing protective clothing such as masks.”
Municipalities will have to tighten their belts this year, according to Remel. This could include pushing investments and rethinking measures. However, this is only possible to a limited extent: “At some point, a street has to be paved again. You can only put it off for a certain time.” The city of Schweinfurt must now use its reserves to ensure a balanced budget.
Example Wrzburg: Missing sales
The city of Wrzburg also expects less income. Spokesman Christian Wei said that the budget for 2020 would be 95 million euros in trade tax revenue. “Due to the Corona crisis, the city of Wrzburg will certainly have considerable shortfalls here, which, however, cannot currently be quantified.” The city also expects lower tax revenues due to increased short-time work and a lack of sales. Since public institutions such as the Mainfranken Theater are closed, one assumes “significant revenue shortfalls”, Wei said.
Example Bad Knigshofen: Missing income from the Frankentherme
These problems can also be seen in Bad Knigshofen (district of Rhn-Grabfeld). The administration decided internally not to start any new projects for now, even if the money was available in the household, says Mayor Thomas Helbling. “There will be a significant slump. That is why we want to be on the safe side and only continue with the measures that have started.” The city was hit hard by the lack of income from the closed Frankentherme. The city’s subsidiary had around 150,000 visitors in normal years.
Example Oerlenbach: Financial problems for kindergarten
“At the moment it is not yet clear what will come to the community,” says Gerhard Fischer, second mayor of Oerlenbach (district of Bad Kissingen) about possible costs that will arise from the crisis. So far, the municipality has spent 5000 euros on Corona protective equipment. In addition to missing tax revenues, Fischer also expects financial problems for the local kindergarten.
But what to do to help municipalities? Fischer is convinced that the watering can principle is not the right solution. “In the end, we all have to pay for this.”
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