Tax revenue in MV: Finance Minister warns of billion-dollar hole!

Tax revenue in MV: Finance Minister warns of billion-dollar hole!

Mecklenburg-Western Pomerania faces significant financial challenges in the coming years. The current tax estimate predicts falling tax revenues in the three-digit million range for the state. A decline in revenue of 95 million euros is expected for 2026 and 111 million euros for 2027. The state government also expects a shortfall in revenue of 142 million euros and 177 million euros for the years 2028 and 2029. Finance Minister Heiko Geue (SPD) presented this in Schwerin and emphasized that despite these declines, revenue for the current year is expected to be around 70 million euros higher than in the previous autumn estimate.

This autumn estimate had already undergone massive downward revisions, which led to the need for a supplementary budget. Loud South Germans The government therefore had to rely heavily on reserves.

Closing financial gaps

As part of the discussions on the budget for 2025, the red-red state government is also faced with a hole of more than 350 million euros. Finance Minister Geue emphasizes that there will be less money available in the future, mainly due to falling population numbers. This leads to less financial aid from the federal government, which brings the state around 323 million euros. After some internal adjustment measures, the additional need for action even increases to 354 million euros. Prime Minister Manuela Schwesig (SPD) assures that savings will be made by the state, not by the citizens. Education and free daycare centers in particular should not be affected by austerity measures.

The country plans to dip into its reserves, which will bring in around 180 million euros, and forgo debt repayment. However, it is unclear how a balanced budget can be achieved in the coming years. Geue assumes that due to demographic developments, around 180 million euros less will come from state financial equalization annually in the future, which could put additional strain on the financial situation. The population of Mecklenburg-Western Pomerania currently numbers 1.57 million people, which is 56,000 fewer than previously calculated, and on average the population is the oldest in the country. This shows the increasing need to design budgets with a clear view of demographic developments.

The state parliament is scheduled to pass the supplementary budget at the end of January. In view of the expected decline in income and the demographic challenges, everyone involved must pull together to secure the financial stability of Mecklenburg-Western Pomerania in the future.