For the first time since 2004, expenditure in the administrative budget, at around 16 million euros, is higher than income at around 15.1 million – which is a minus on the bottom line.
The main reason for this is the high tax revenue in 2021, especially from trade tax. Because the tax capacity of the municipality in 2021 is the basis for calculating the district levy in 2023. With an expected tax rate of 49.5 percent, the district levy for Waging this year will be around 5.3 million euros. At the same time, the key allocations will fall to around 82,000 euros this year, also because of the high tax revenue in 2021.
Withdrawal from reserves required
Current income is not sufficient to compensate for the resulting additional burden. In order to balance the administrative budget, funds must be withdrawn from the reserves and thus transferred from the assets to the administrative budget. These funds are then no longer available for investments. The budget can only be balanced because there are these reserves, because according to the legal requirements, loans to compensate may not be taken out.
However, borrowing is possible and necessary to balance the budget. Loans totaling around ten million euros are planned for the years 2023 to 2025. The interest burden in the administrative budget increases accordingly. For the loans of around 4.8 million planned for 2023, interest payments of 90,000 euros were estimated, assuming an interest rate of 3.5 percent and borrowing only in the third quarter of 2023.
Treasurer Bernhard Kraus pointed out insistently that the long-term efficiency of the municipality can only be considered secured if the amount of the additions from the administrative budget to the property budget is at least as high as the estimated repayment. This so-called mandatory contribution is not guaranteed in the current financial planning. From 2024 to 2026, the plans envisage that between around 140,000 and 554,000 euros will be added to the asset budget every year. However, the repayments for the loans required to process the planned investments would have to be estimated at around EUR 575,000 per year and would therefore exceed the allocations.
For this reason, expenditure in the administrative budget must be reduced in order to generate a higher surplus. To do this, it must be checked whether all the estimated renovation work on land and municipal buildings is actually necessary. At around EUR 612,000, the funds budgeted for building maintenance in the 2023 budget are significantly higher than those used in 2021, for example, which were EUR 162,000.
Sharp increase in personnel expenses
When it comes to personnel expenditure in childcare facilities, care must be taken to ensure that the recommended employment ratio of 1:10, i.e. one caregiver for ten children, is at least approximately achieved. In some cases, this ratio is far below the recommended value, i.e. one employee looks after fewer than ten children. Because the serious increase in personnel expenses from around 550,000 euros in 2021 to 2.4 million euros in 2023 is putting the administrative budget to a hard test, according to the treasurer.
The planned volume of the asset budget for 2023 is around 15.2 million euros. Compared to the previous year, this means a significant increase of around 7.9 million euros or around 107 percent. Despite existing reserves, a loan of around 4.8 million euros will be necessary if the transaction goes according to plan.
Among other things, measures for road expansion, the construction of children’s playgrounds, development costs for building areas and costs for the acquisition of land by the municipality, flood protection and moor renaturation, the broadband expansion, the redesign of the tourist information must be financed. The fire brigade requirement plan that is now available results in necessary purchases and construction measures such as the construction of a new fire brigade equipment house in Otting, the construction of extinguishing water ponds, cisterns and hydrants and the installation of exhaust gas extraction systems in the fire brigade equipment houses in Gaden and Nirnharting.
The demolition of the old gym, the general renovation of the tartan track at the school sports facility and the construction of an all-day school are major projects in the near future. In order to improve the currently economically precarious situation in the municipal works, an increase in share capital of 1.4 million euros is planned.
Investments must be reduced
“A planning volume of 15 million in the asset budget is clearly above the capacity of a municipality with only 7000 inhabitants,” says the treasurer, “the investment volume must be significantly reduced in the coming years”. The aim must be that the estimated borrowings are actually not used in full. Borrowing is poison for a household and makes it difficult to save later because of the repayments that have to be made.
The municipality’s level of debt will rise sharply as a result of the planned loans. With the exception of a home savings contract that the municipality is saving, the reserves will be almost completely liquidated when the existing investment planning is completed.
Mayor Matthias Baderhuber and the municipal council were also aware of the tense situation, which they want to get away from as soon as possible – in the interests of responsible budgetary policy. With one dissenting vote, the municipal council decided to enact the budget statute with a budget for 2023. The financial planning up to 2026 was approved with the proviso that the planned new debt will be significantly reduced by the 2024 budget. This decision was unanimous.
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