Frankfurt lives from the substance – this is what the Hessian Court of Auditors of Frankfurt city policy wrote in the register. The budgetary situation is difficult, and no party representative contradicts this. However, the fact that the Court of Auditors specifically questioned the billion-euro project for a new building for the municipal theaters in its municipal report for 2021 and brought into play an expansion of daycare groups in order to be able to look after more children without additional jobs causes a lack of understanding in the city treasury: It is clear that “That prioritization is necessary in the coming budget,” says a spokesman for treasurer Bastian Bergerhoff (The Greens).
However, it is “not helpful to take up such individual projects now”. The new coalition of the Greens, SPD, FDP and Volt is looking “broader at the issues”. The city government is currently working on the new budget under the auspices of the treasurer.
The audit office, which according to the Hessian state constitution is supposed to secure the state financial control as an independent institution, but has no sanction options, is calling for a U-turn in Frankfurt’s budget policy. The city has deficits in the profit and loss account in three out of five audited years, which totaled more than 300 million euros, according to the report, which was presented to the public at the end of last week.
In particular, it is criticized that Frankfurt did not manage to make provisions for the worse years in the good years before the corona pandemic. “We have been advising for years to use good economic times to take precautions,” complained the President of the Court of Auditors, Walter Wallmann. The Frankfurt audit office supports the colleagues from Darmstadt: “For several years we have been criticizing the structural deficit in our final reports and in the main and finance committee,” said office manager Hans-Dieter Wieden.
Failures could not be compensated despite massive aid
In fact, the city has been operating in deficit for years. In 2017 the deficit was almost 200 million euros, in 2018 it was almost 28 million euros – and in 2019 it was again more than 100 million euros. The loss-making year 2020 with a minus of 65 million euros falls out of line because the corona pandemic has caused massive revenue shortfalls in the core administration and, above all, the municipal investments such as the trade fair or the airport. The Frankfurt budget is also particularly dependent on trade tax income compared to Hesse – which fell by around 500 million euros in 2020.
The Court of Auditors’ criticism is sparked by the fact that Frankfurt has not succeeded in compensating for these failures despite massive aid from the federal and state governments. Before the crisis, Frankfurt had the highest trade tax income in Hesse with more than two billion euros. That is why the city received the highest grants with around 440 million euros, a third of all state funds of 1.2 billion euros. “Municipalities with such a high dependency on trade tax income should be aware of the risk of volatility,” the report says.
For various reasons, the city has drawn on its reserves over the past few years, which have been continuously shrinking since their peak in 2016 of around 771 million euros. At the end of 2020 these amounted to more than 372 million euros, at the end of the third quarter of this year they were 284 million euros. According to a forecast by the finance department from April 2021, the reserves could shrink to only around 137 million euros by 2024. If the administration continues to produce deficits non-stop, it will be more and more difficult to compensate for them with the financial reserves of the city treasury.
Concern about “costly projects of the new coalition”
The CDU city councilor Veronica Fabricius shows understanding that in the past – until this year her party friend Uwe Becker Kämmerer was – reserves were used to meet the requirements of a growing city, for example with the infrastructure.
At the same time, however, she warns of “costly projects of the new coalition”, since one could “get scared”. The parliamentary group leader of the Left in the Römer, Michael Müller, criticizes the Court of Auditors for wanting to increase the size of the daycare group: “Those who want to strengthen early childhood education must not turn the care key.” Hessen go to the total costs “.
The fact that the Court of Auditors recommends not building the new municipal theaters also shows that there is a lack of knowledge of the matter. As reports show, the renovation of the extremely dilapidated double system would be by far the most costly and risky option. A new building would be cheaper. Mayor Peter Feldmann (SPD) recently said succinctly about the construction costs: “It costs what it costs.”