“No longer affordable”
Lindner: No further funds to states and municipalities
03/21/2023 2:51 p.m
The federal government has taken on massive debts in the past few years of the crisis in order to cushion the consequences of Corona and inflation. Finance Minister Lindner is now insisting on a return to normality. This also means that the federal states and local authorities cannot count on further funds from the federal government.
Finance Minister Christian Linder puts a stop to further financial aid for states and municipalities. There is now an imbalance: the federal government is struggling with high deficits, while the federal states and local authorities have recently achieved financing surpluses. In the monthly report The Federal Ministry of Finance states that the federal government has taken on the main burden of crisis financing in recent years. “In order for the federal government to be able to fulfill its original tasks within the framework of the regular upper limits of the debt rule and to be able to cope with the enormous challenges of the future, further relief for the federal states and municipalities by the federal government is no longer affordable.”
Finance State Secretary Luise Hölscher pointed out that during the Corona crisis in 2020 and 2021, the federal government assumed around 72 percent of the pandemic-related expenses and 86 percent of the guarantees granted. In the relief packages in the course of the energy crisis, the federal government will bear almost 60 percent of the costs until 2024. “In addition, there is massive support from the federal government for the states and municipalities in their areas of responsibility.”
Fuel for refugee summits
The refugee summit planned for May 10 by the federal and state governments should thus receive further fuel. The federal states are calling for a significant increase in aid for accommodating refugees. Around one million people came to Germany last year. States and municipalities feel left alone when it comes to accommodation and integration.
According to the ministry’s report, tax revenues fell by 4.1 percent in February compared to the previous year. The main causes were tax relief, such as the increase in the basic tax allowance and the shift in the benchmark tariff values due to the Inflation Compensation Act, as well as the temporary reduction in sales tax rates on gas and district heating.
In February, the federal government posted tax revenue of 27 billion euros, which was the same as in the same month last year. At 26.3 billion euros, the federal states took in almost seven percent less in taxes. Overall, tax revenue in February amounted to around 60.6 billion euros. In the first two months of the year, tax revenue fell by a total of 1.8 percent to 118.6 billion euros. While the federal government posted growth of 3.3 percent in January and February, the federal states received 3.7 percent less in taxes.