According to a study by the state development bank KfW, the Bavarian municipalities are in a good position in a nationwide comparison. Tax revenue increased more sharply last year and debt is far lower than the national average. 48 percent of the treasurers surveyed in Germany rated their financial situation at the end of 2021 as negative, 21 percent as positive, KfW announced on Monday in Frankfurt am Main. Trade taxes have risen sharply, especially in structurally strong regions.
More income, fewer loans
According to KfW, tax revenue in Bavaria rose by 18.9 percent in 2021, more than the national average of 15 percent. Total revenue increased by 4.6 percent and expenditure by 3.5 percent. “In total, the municipalities in Bavaria closed the 2021 budget year with a surplus of 17 euros per inhabitant.” That was less than the German average of 55 euros per inhabitant.
But the Kassenkredit debt of the Bavarian municipalities was only 19 euros per inhabitant at the end of 2021, compared to an average of 382 euros per inhabitant for all German municipalities. Cash advances are used by the municipalities to close short-term budget gaps.
And with other loans, which are primarily used for public investments, Bavaria is also far better than Germany with an average of 1,306 euros per inhabitant at 1,048 euros per inhabitant.
High energy and construction prices are a cause for concern
The municipal finances would have to be more stable and crisis-proof, said KfW chief economist Fritzi Köhler-Geib. A follow-up survey on the KfW municipal panel in April shows that “the increased energy prices are already having a noticeable impact on many municipalities”. In many places, budgets would be adjusted.
The increased construction prices increased the investment backlog. Cities, municipalities and districts nationwide would have put the backlog at 159 billion euros by the end of 2021. Schools and roads accounted for more than half of the overdue investments.
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