Harsh budget debates are underway in Frankfurt and some projects could at least be postponed: Frankfurt treasurer Bastian Bergerhoff on the effects of the war in Ukraine.
Six months ago, the Frankfurter Rundschau conducted an important interview with treasurer Bastian Bergerhoff (Verdi) on the budget. At the time, Bergerhoff was only presenting the draft budget. Although a deficit of € 220 million is expected and the city of Frankfurt wants to borrow € 600 million and almost run out of reserves, the treasurer described the budget as responsible. The war in Ukraine had just started at that time. Many hoped for a quick end. The same was true of inflation. Both hopes were not fulfilled.
Mr. Bergerhoff, six months after our conversation: is the budget that has now been approved by the city parliament still responsible?
Yes, it’s him. He must be, otherwise the Interior Ministry will not approve it. We expect this to happen in the near future. The city remains able to act on this budget. But it is true that the circumstances have completely changed. This has a huge impact on the financial situation of the city. We will have to react to this.
How badly is Frankfurt financially affected by the numerous ongoing crises?
We are experiencing a turning point in financial policy. Two things happen: First, inflation is back. The consequences are higher prices and also higher wage agreements. Costs for workers, including citizens, are increasing. But there are also consequences: the federal government benefits from the development through additional revenue from sales and income tax. In the municipalities, however, the property tax and the trade tax are under pressure. The second phenomenon is: interest rates return. This makes our loans more expensive. Both together lead to a critical financial situation.
Now the budget for this year promises savings starting next year. 134 million euros per year are foreseen. The amount has already been divided between the individual departments. Those numbers are now obsolete, right?
I wouldn’t talk about waste. But obviously we have to rethink some things. In the next few days, I will be meeting with the heads of departments and then we will discuss together how to come up with an approachable budget for 2023.
Interviews could be quite difficult. In the previous approach, for example, the savings should be made mainly in the education and construction sector. Department Head Sylvia Weber will ask you how schools should heat up in the future. And the head of the culture department Ina Hartwig might point out that many cultural institutions will simply no longer exist if they are also supposed to save in this situation.
I don’t know what my colleagues will tell me. But these claims can already fall like this. They would also have their justification. But that doesn’t change the fact that we as a municipality have to obey the laws. Even in difficult times, we need a budget that the Interior Minister accepts.
But the planned savings will not be sustainable. So will you have to remove the projects from the coalition agreement?
At least it is possible that we will have to postpone the projects. We have to be realistic.
Can you be more precise?
Per person
Bastian Bergerhoff he has been Treasurer of Frankfurt since September 2021. In addition, the politician, who has just celebrated his 54th birthday, is responsible for the personnel and maintenance of the investiture churches.
With the Greens Bastian Bergerhoff has made a name for himself primarily as a district president. The physics doctor, who worked as a software expert prior to his job at Römer, led the party for ten years by changing colleagues on the board and negotiating several coalition deals. In the local elections of 2021 he ran for the best male candidate for the Greens. geo
No Why don’t I say it now: I am the chamberlain and we have to do without this and that because of the financial situation. It’s not my style, and it’s not my place. We will evaluate together in the magistrate how to react to the situation.
These conversations are therefore just a single blow and stab, right?
I don’t expect it. Obviously there will be discussions. And it would be completely out of this world and irresponsible if we said that the war in Ukraine had no impact on us. Of course he did, all the department heads know that. Now we need to work together and see what we can achieve.
The honest answer would not be: Can’t we afford anything beyond the absolute basic requirement? An example: ABG has suffered enormously from the increase in construction costs. Under the coalition deal, ABG now has to invest heavily to create affordable housing. Is it possible at the moment?
We need to talk about this too. But it is also not true that we have no room for maneuver. Commercial tax revenues have so far been higher than expected this year. Therefore, despite the war and inflation, our annual result will be roughly what we expected in March.
If the trade tax brings a lot of money, there is a temptation to increase the assessment rate, right?
The temptation is always there, but it would be problematic and would also contradict the agreements. The trade tax remains a stable basis for us, but at the moment there is no increase on the agenda.
What’s under discussion to improve the revenue side? Why you will have to.
We have to hold the federal government accountable. We have also formulated this clearly to the German Association of Cities. On the one hand, municipalities cannot support most of the newly agreed aid packages, as the federal government understands. Third party financing between federal, state and local authorities is currently not possible for us. In addition, the federal government must establish its own aid program for municipalities.
What should it include?
For example, it helps finance public transport. Or when running clinics. Both are huge objects for us. And the federal government has the ability to help financially, as it recently demonstrated.
Interview: Georg Leppert
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