Tuesday, December 7th, 2021
Higher taxes, darker streets
Municipalities have to save because of Corona
Due to the pandemic, more and more German cities and municipalities are complaining about lost revenue. Austerity measures include a more expensive water supply, closed swimming pools or darker street lighting. In some cases, both citizens and companies have to expect tax increases.
In view of the Corona crisis, according to a survey, numerous municipalities want to save more and secure additional sources of income. The proportion of cities and municipalities that wanted to increase taxes and duties rose by six points to 70 percent compared to the previous year. This is what the Stuttgart-based consulting firm Ernst & Young (EY) reported, citing its own representative survey of over 300 municipalities in Germany with at least 20,000 inhabitants.
In two out of five municipalities surveyed, water supply and garbage disposal could become more expensive, as EY further announced. Property tax could rise in just under a third of cities and municipalities (32 percent). At 29 percent, the trade tax screw could be turned.
The local swimming pool is most often on savings lists in town halls, it said. According to this, 16 percent of the cities and municipalities surveyed are planning to close a pool or to operate it only to a limited extent. In 13 percent of the municipalities, it could get darker because of the austerity measures in street lighting.
The municipalities complain about the pandemic and its economic consequences lost income. Regardless of the support from the federal and state governments, the budget situation is “very tight,” according to the study. Mattias Schneider, head of EY’s Government & Public Sector in Germany, said that even in a good economic situation, debts were only slowly reduced. “The current crisis shows that the financial resources of the German municipalities are anything but sustainable – and that the gap between poor and rich municipalities is widening,” said the expert.