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Alexander Lorz (CDU), Finance Minister of Hesse.
© Arne Dedert/dpa
With surpluses from good economic times, Hesse avoided new debts last year.
But what does the future hold in the face of wars and crises?
Wiesbaden - Hesse managed to manage without new debt in 2023, but sees high risks for future budgets.
“The original plan was for 211 million euros in new debt.
We were able to do without that,” explained Finance Minister Alexander Lorz (CDU) on Wednesday in Wiesbaden with a view to the past year.
The bottom line is that the “famous black zero” has been achieved.
“This means that Hesse has presented its seventh budget without new debt since 2016.
Debts only had to be taken out in the first Corona year of 2020.”
With a view to the Russian war of aggression against Ukraine, the shortage of skilled workers and delivery bottlenecks, Lorz said: “In 2023 we will have received almost a billion euros less in taxes than assumed when planning the budget.
Money that we had set aside for precisely such drops in the economic compensation reserve has now helped us to balance the budget.”
According to the Ministry of Finance, falling tax revenues are always a sign of a crisis.
“The German economy shrank in 2023 and the federal government’s current forecasts assume minimal growth of just 0.2 percent for 2024.
In October 2023 they expected growth of 1.3 percent.” Such prospects also have an impact on the Hessian state budget.
According to Finance Minister Lorz, Hesse not only recorded “a good loss” in 2023, but also has to expect losses in terms of financial planning in the next few years.
According to the Ministry of Finance, it is feared that the spring tax estimate will reveal further losses for the state budget.
In addition, there would be foreseeable additional burdens such as increases in the income of state employees and changes in tax policy at the federal level.
Lorz warned: “The golden years of budget policy are over for the time being.” At the same time, the finance minister assured: “Nevertheless, we will continue to actively shape budgets in the future.
We will no longer be able to afford everything, but we will be able to do everything this country needs.” The debt brake should be adhered to as a guideline.
The state government also wants to enable children and grandchildren to have a self-determined budget policy.
Lorz did not rule out taking on new debt this year.
For 2023, Hesse has withdrawn a total of almost 1.9 billion euros from the economic compensation reserve, so that there is only around 150 million euros left in this pot.
It is to be replenished with around one billion euros.
The minister further explained: “In 2023, we achieved a lot: investments rose to a record high of almost 2.8 billion euros, the municipalities received more money than ever before from the municipal financial equalization of 6.8 billion euros and a whopping 3.4 Hesse had to pay billions of euros into the financial capacity equalization - the former state financial equalization - for poorer federal states." In this equalization pot of the federal states, Hesse transfers the most money to Bavaria.
“That hurts us a little,” commented Lorz.
But the idea of solidarity requires this.
The minister aims to have the supplementary budget for this year passed in the state parliament by the summer break.
The new figures are intended to reflect the priorities of the new black-red state government and adapt the current budget to the economic conditions.
The FDP opposition in the state parliament spoke of a bad start for black and red: “New ministries and additional state secretaries are unreasonable for taxpayers in these times.” In the supplementary budget, “proposals for significant savings and for financing the lavish wishes of black and red should be made.” Red, otherwise there is a risk of new debts and possibly even additional burdens for citizens through tax increases.
The opposition Greens, who until recently were in government with the CDU, spoke of a “gold standard of black-green budget policy” against which the black-red coalition would have to be measured in the future.
The AfD opposition criticized Lorz for painting the picture that Hesse had done a solid economy.
“In fact, the finance minister dipped heavily into the economic reserve with 1.9 billion euros.”
In January 2023, the state parliament passed the double budget for 2023/2024 with the votes of the then government factions of the CDU and the Greens.
At the time, income of 33.7 billion euros and expenses of 34.5 billion euros were estimated for 2023.
The then opposition factions of SPD, AfD, FDP and Left voted against the budget.
The black-red state government started on January 18, 2024.
Since then, the former Minister of Education Lorz has also been at the head of the finance department.
dpa