Schwerin settles financial dispute: Budget 2025 ensures planning security!

Schwerin settles financial dispute: Budget 2025 ensures planning security!

After long negotiations, the city of Schwerin has approved a budget for 2025. This happened in a special meeting in which city representatives approved a compromise proposal by a large majority. The compromise makes it possible to secure necessary investments, such as the planned World Heritage Museum, and the financing of essential social and cultural projects. This is reported by the Baltic Sea newspaper.

In the past, proposals for a 2025/2026 double budget were rejected in the December and March meetings. A key reason for this was planned tax increases in property tax B, trade tax and dog tax. This rejection resulted in the city losing revenue of over three million euros. A central point of the compromise that has now been decided is a budgetary freeze in certain areas, which was recommended by the Ministry of the Interior.

Budget situation and planning security

With the budget statutes that have now been passed, the requirements are met, so that grant recipients have planning security for 2025. Schwerin has been struggling with budgetary problems for 30 years and therefore receives support from the state, but only if new debts are avoided. Last year, the city was able to achieve a budget surplus of three million euros and was supported accordingly from the debt relief fund.

Nevertheless, the financial situation remains tense. Increasing personnel and interest expenses as well as expenses for social and youth welfare represent a challenge. At the end of 2023, Schwerin had taken out around 83 million euros in cash loans to cover ongoing expenses. The goal is to achieve full budget balance by 2029 at the latest.

Introducing the double household

The head of the finance department, Silvio Horn, recently presented the key points of the double budget for 2025/2026. The financial budget has a volume of around 430 million euros. While the aim is to achieve a “black zero” in the financial budget for the years 2025 and 2026, there are still fears that the requirements of the budget security concept will be missed by 2029. Additional expenses, such as free school transport for primary school students, were not included in the current draft budget as they would cause additional costs of around 1.2 million euros.

In order to balance the budget, it is necessary to increase various taxes, such as the accommodation tax, dog tax and business tax. At the same time, fees for municipal sports facilities are to be increased in order to cover increasing management costs. Horn emphasizes that an increase of 5.86 million euros is required for 2025 and 6.53 million euros for 2026 in order to achieve the set goals.

Investments and comprehensive planning

The financial situation is further burdened by external factors, including increased interest rates and high collective bargaining agreements. According to the 2022 census, Schwerin's population has decreased, which poses further budgetary risks. What is positive is that cash loans have been reduced by almost half since 2016 and are now below 90 million euros.

Investment payouts of around 69 million euros in 2025 and 85 million euros in 2026 are planned for the coming years, with a focus on the education sector. Important projects include, among others, the new school section in Lankow with a cost of 25.3 million euros and the renovation of the Peace School for 15 million euros. Despite the financial challenges, the double budget does not provide for any increase in administrative positions, with the exception of the West Mecklenburg Integrated Control Center, 90% of which is funded by health insurance companies and neighboring districts.