ESome cities and municipalities in Hesse have received more money from the state and federal government than they had to record in losses in trade tax income due to the corona pandemic. The President of the Hessian State Audit Office, Walter Wallmann, announced this on Friday at the presentation of the municipal report 2021 and the large cities report. He called on these communities to show solidarity and voluntarily transfer back any money they received.
According to Wallmann, the support from the federal and state governments to compensate for the trade tax losses of around 1.2 billion euros has resulted in Hesse’s cities reporting a total surplus of 295 million euros. The President expressed criticism of the budget management of the city of Frankfurt and warned against the new construction of the city theaters.
According to Wallmann, 275 municipalities were able to show positive annual results last year despite the pandemic-related slump in trade tax. 169 cities and municipalities had to report a deficit in their budgets despite the help of federal and state governments. Without the compensation payments, there would have been a loss of around 918 million euros.
The municipalities benefited differently from the aid. According to Wallmann, the North Hessian Calden and the Central Hessian Cölbe showed an arithmetical minus of more than half a million euros each, despite aid payments, while the North Hessian Melsungen and Gründau in the Main-Kinzig district each had two million additional income. 141 of the 422 municipalities had higher business tax revenues than in 2019 even without the help of the federal and state governments. According to Wallmann, some of these cities still received aid money.
Demand for solidarity between cities and municipalities
“A possible repayment of overcompensation or additional compensation of existing deficits is not planned,” said Wallmann: “Here we expect the state to develop a mechanism that avoids such overcompensation in the future.” Wallmann appealed to the solidarity between cities and municipalities: “In our opinion, those municipalities in which tax losses were significantly overcompensated should voluntarily and unbureaucratically transfer these profits back so that we can help those whose tax losses have not yet been sufficiently compensated.” , 5 million euros, even though it recorded a gross increase in trade tax of around 58 million euros year-on-year.
According to Wallmann, the city of Frankfurt is a loser in the Corona crisis. Before the crisis, she had achieved the highest trade tax income in Hesse with more than two billion euros. Therefore, with around 440 million euros, she received the highest grants, which after all made up a third of all compensation funds of 1.2 billion euros. Nevertheless, the minus of 639 million euros in trade tax income could not be fully absorbed. Wallmann described the fact that Frankfurt had access to its reserves even in years with high tax revenues as remarkable. In three out of five years audited, the city showed deficits that totaled more than 300 million euros.
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