Despite the Corona and the war, the financial situation of the city has turned out better than expected, and the deficit is decreasing sharply. Despite this, the municipal budget remains in the red, and the reserves are used up. Therefore, the mayor and treasurer are proposing a strict austerity course that can be quite painful at times. And in the medium term, it also foresees tax increases.
Have budget talks Mayor Frank Stein and Chamberlain Thore Eggert laid out the baseline and explained his plan at the City Council on Tuesday. The main message, very briefly: we will manage acute crises and structural problems, but if we do not respond with finances, we will soon fail again.
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The city can’t really go bankrupt. However, after exhausting their reserves, they fall (again) into the concept of budget security (HSK): Then the municipal supervisory authority takes over, investments are limited, voluntary spending is reduced. A situation that the Bergisch Gladbach administration and politicians want to prevent with all their might.
For this, in the 2023 budget – but also in subsequent years – expenses must be reduced and revenues increased. How the treasurer intends to do this can be partly heard from the budget speeches, but even better from the joint performance plan and the “voluntary HSK”. To make this understandable, we will examine this question step by step and move on to the reduction and increase of taxes a little below.
Since 2017 The city of Bergisch Gladbach generated a small surplus year after year, so in 2021 was released from the last HSK and is currently able to operate quite freely. Investments begin, especially in schools and transport.
First of all, it has to do with this The pour-back method contributed, with which Mayor Stein released hidden reserves and a profit of 135 million euros in 2020 and included them in the budget. Thanks to this money injection, the 2020 budget ended not with a deficit of 8 million euros, but with a surplus of 126 million. This money was compensation reserve packed – and now helps to offset the budget deficit.
in 2021 surprisingly, the city again generated a surplus of 2.6 million euros.
Because of in 2022 the treasurer initially expected a deficit of 42 million euros. It won’t be so bad now. Because the trade tax is bubbling, and the burdens of the pandemic and the Ukrainian war are initially excluded and written off only from 2026 onwards. Data is still lacking, but under certain circumstances this year’s shortfall will remain even in the single digits.
The new 2023
Because of in 2023 The Treasurer has now presented a draft budget which will be debated in politics in the coming weeks and will be decided in the spring. And this project also shows some amazing changes:
2023 (ordinary) income develop positively; a year ago it was calculated at 324 million euros, now it is 362 million. The tax revenue method alone grew ten percent to $193 million. euros (thanks to the trade tax), and the income from appropriations is growing just as strongly.
Expenses (ordinary expenses) is also higher than previously thought, but the jump from 386 to 408 million. euros is not that big. Part of this was due to the district levy, which is a good five million euros higher than in previous years.
Editor’s note: All budget documents for 2023 can be found here on the city’s website.
It will still be decent result reported with a minus of 45 million euros. Much less than what was feared last year (63 million), but still very high. And yet, the treasurer manages to reduce this deficit to just 18 million euros.
How the deficit will decrease in 2023
Chamberlain Eggert points to a number of factors that contributed to the fact that the deficit ended up being significantly lower. This includes your own accomplishments and some things that just happened.
First, the treasurer reduced planned spending. Step by step, letting some air out of the household: expenses are planned again and again, which later are not done at all. For additional staff who are absent or late…