Financial relief: municipalities worried about billions in losses!

Financial relief: municipalities worried about billions in losses!

There is a heated debate in Hesse today: There are many unanswered questions at a conference that deals with finances and the federal government's new relief package. As the hr info reports, the main goal of the relief package is to give the economy a real boost. But as positive as that sounds, the concerns of the states and municipalities cannot be dismissed. Many fear massive revenue losses running into billions.

The discussion round is well-known: Markus Röder, the non-party mayor of Hofbieber and President of the Hessian Association of Cities and Municipalities, as well as Dr. Philipp Rottwilm from the SPD, who works on the Finance Committee of the Bundestag and also advocates for construction, housing and urban development. The participants would like to discuss the possible negative effects of the relief package together.

The relief package in detail

In recent years, federal financial policy has introduced many measures to relieve the financial burden on municipalities. That's how it looks the Federal Ministry of Finance before: Since 2018, 5 billion euros have been flowing annually to strengthen the financial strength of municipalities. This sum comes about through an increase in the state and municipal share of sales tax as well as a higher federal contribution to the accommodation costs.

Particularly important is the full reimbursement of expenses for basic security in old age and in cases of incapacity, which is estimated at 10.9 billion euros in the federal budget for 2024. The contribution to the costs of accommodation and heating is also expected to increase to 11.1 billion euros in 2024. In this context, it is crucial that cities and municipalities are well positioned to overcome the challenges ahead.

A look at electromobility

As part of the relief package, the promotion of electromobility also plays a central role. The savings bank points out that companies can write off 75 percent of the purchase price of company electric vehicles for tax purposes in the first year. Buying an electric car for 40,000 euros makes it possible to deduct 30,000 euros in the first year.

This measure is intended not only to promote e-mobility, but also to strengthen Germany as a location. Vehicles priced up to 100,000 euros are affected by these regulations, which creates an incentive for companies to invest in greener technology. This is a positive development that also benefits the municipalities.

At a time when the demands on municipalities are constantly increasing and financial concerns are great, it remains to be seen how the current discussion about the relief package will turn out. What is clear, however, is that many are hoping for a solution that will benefit municipalities and citizens while promoting economic stability. The exchange at today's conference is an important step in addressing these challenges.