As of: March 13, 2024, 6:56 p.m
By: Felix Gattinger
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A view from the town hall: What options does the city have to get out of the ongoing crisis?
© Photo: Gattinger
In a unanimous recommendation to the city council a few days ago, the members of the Kaufbeuren finance committee voted for a significant increase in property and trade taxes.
Kaufbeuren
- The budget situation, which has been tense for years and which has worsened dramatically over the past year (we reported in detail), is forcing the city not only to make investment provisions, to forego mandatory tasks, to undertake a radical austerity course in all administrative departments and to various Increases in contributions and fees.
Sensitive increases in the assessment rates for property tax B and trade tax were also decided as part of the budget consultations and will now be implemented by the administration retroactively to January 1, 2024.
Finance Committee recommends increasing property and trade taxes
The assessment rate for trade tax, one of the most important revenues for municipalities, is to be increased by around 7 percent from 330 percentage points to 353, which means that the tax administration expects additional income of around 1.4 million euros.
The administration wants to increase the assessment rate for property tax B, which is offset against the respective property tax value, by 11.7 percent from 385 to 430 percent.
This is expected to bring in additional income of around 77,000 euros.
The only committee member to vote against the recommendation to the city council was Dr.
Thomas Jahn (CSU), who says he believes tax increases are completely out of place in times of economic crisis.
Finance Committee recommends increasing property and trade taxes – comment
No economic stimulus program
Tax increases are generally seen as problematic in times of economic crisis, as they can prove to dampen investment and the economy. So far, Dr. Thomas Jahn is not wrong. In the Kaufbeuren case, however, the tax increase is not intended as an economic stimulus program, but rather serves to submit an acceptable budget to the Swabian government for approval. When there is little commercial space, low economic power and high expenses, the financial administration is obliged to try to generate income. With a debt level that has risen from 25 million euros to 44 million euros within a year and at the same time stagnating income, the city is forced to apply for stabilization aid from the Free State. As with individual social benefits, there are also fulfillment criteria for municipalities that do not just consist of high levels of debt. Kaufbeuren also needs to take visible measures to improve its revenue.
By Felix Gattinger