12. November 2020 – 21:51 Clock
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The Corona crisis is costing Bavaria dearly: The Free State is threatened with massive tax losses for the current and the coming year. According to the estimate made on Thursday evening, the 2020 state budget will have to cope with a decrease of around 3.5 billion euros compared to the estimate made last autumn before the Corona crisis – and a minus of 3.7 billion euros for 2021.
“The latest estimates are slightly better than feared in September,” said Bavaria’s Finance Minister Albert Füracker (CSU) on Thursday evening for the German press agency in Munich about the regionalized November estimate. Even if the forecast decline in revenue is lower than feared in September, in view of the figures for the coming fiscal year there is probably no way around new borrowing in the billions. To do this, the debt brake must be repealed again.
For 2020, the appraisers corrected the losses by 685 million euros compared to September and by around 350 million euros for 2021. “Because of the tax shortfalls in the 2021 budget, we will not have to calculate with more debts than was previously planned,” said Füracker. Thanks to the solid financial policy of the past few years, the budget was stable even in this difficult phase. “We continue to invest in the future instead of blind savings or even tax increases.”
The forecast in May and the additional forecast made in September due to the pandemic had already predicted severe tax losses in the billions in Bavaria. A few days before the state government’s meeting to draw up the budget for the coming year, it is now becoming apparent, as in the federal government, that the financial consequences due to the strong third quarter are not likely to be quite as bad in the end as feared in the meantime.
Nevertheless, this is the historically worst tax estimate for Bavaria, which is the tax leader among the federal states. For comparison: after the outbreak of the global financial crisis, the estimated drop in income between autumn 2008 and May 2009 amounted to around 1.5 billion euros.
In the coming week, the state government wants to determine its draft for the budget plan 2021 in a retreat. Füracker had already declared after the additional tax estimate in September that it would be “dishonest to say in this situation that Bavaria does not have to take out any loans”. How high the new debt will actually be in the end is open. But it is also a fact that a few weeks ago the Free State agreed with the municipal umbrella organizations on another record financial equalization for 2021: 10.3 billion euros are already fixed in the budget plan on the expenditure side.
After many years in which Bavaria was even able to repay old debts, 2021 would be the second year in a row after this year that the Free State would have to raise fresh capital. At the end of 2019, Bavaria was in the chalk with donors with around 27 billion euros. Also this year, the holes in the state budget and the billion dollar aid programs due to the Corona crisis will be compensated for with new debts – the state parliament has approved borrowing of up to 20 billion euros this year.
Bavaria at least benefits from the fact that the Free State enjoys a high reputation among lenders and therefore receives very good conditions for money loans on the financial market. In September, for example, the agency “Standard & Poor’s” gave him the top rating “AAA / A-1 +” with a stable outlook. It is the only state with the highest rating. The reasons for this are Bavaria’s considerable reserves, the great economic power and the relatively low level of debt in relation to the number of inhabitants.
The tax assessment working group actually meets twice a year, in spring and autumn. Because the effects of the corona pandemic in the spring were difficult to assess, an extraordinary meeting was inserted for September.
Source: DPA
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