Mainz is fighting the financial crisis: trade tax rises, investments fall!

Mainz is fighting the financial crisis: trade tax rises, investments fall!

The 2025 budget draft for the state capital Mainz faces major challenges. How mainzund.de reported, the supervisory authority ADD rejected the city's budget at the end of March 2023 because of an excessive deficit. Finance department head Günter Beck (Greens) will present the new draft to the city council next Wednesday after intensive consultations with the ADD to reach an agreement.

The city administration plans to achieve financial compensation through reduced investments, the liquidation of a special item and the formation of a consolidation commission. This is intended to develop proposals for long-term budget consolidation. In addition, the trade tax will be increased by 20 lifting points, which is expected to lead to additional revenue of around 10.7 million euros. Property tax B remains at 480 points for residential properties, but at 720 points for non-residential properties, which will bring in around 3.5 million euros additional.

Deficits and structural problems

The total deficit for 2025 in Mainz amounts to 134 million euros, with the amount for social benefits alone being around 200 million euros. Mayor Nino Haase (independent) complains about structural underfunding. These deficits can also be observed in other municipalities in Rhineland-Palatinate. Loud swr.de Eleven households from cities and districts have already been rejected, including Koblenz and Zweibrücken. It is criticized that the state's financial resources are not sufficient to meet the increasing demands, especially in the social area.

The CDU in Mainz was able to prevent the increase in property tax B for residential buildings. Nevertheless, CDU parliamentary group leader Ludwig Holle is demanding compensation payments from the federal and state governments in order to ease the city's financial burden. The focus on lower spending by 2026 shows the urgency of the situation in the city.

Further measures in the municipalities

Across Rhineland-Palatinate, municipalities have to recalculate their expenses and income in order to reduce their deficits. An increase in property tax is planned in Koblenz, while Kaiserslautern and Frankenthal have already decided to do so. The assessment rates vary greatly between cities. For example, the assessment rate in Kaiserslautern will be increased to 775% for residential properties and to 1,520% for commercial properties.

Amid these financial challenges, many municipalities are taking austerity measures to reduce expenses. Some cities are eliminating company cell phones and uniforms for employees, among other things. In the Vulkaneifelkreis, planned expenditure for civil defense, fire and disaster protection must be postponed due to a rejected budget. There are ongoing calls for the federal government to take over old municipal debts in order to reduce the financial burden on cities.

The final decision on the new budget for Mainz is scheduled for June 25, 2023. The city board has already decided on key parameters that will now be incorporated into the budget statutes. The political actors in the city council are faced with the challenge of finding a workable compromise to get the city's finances on track.