Bundestag decides on billions in relief for municipalities!

Bundestag decides on billions in relief for municipalities!

The Bundestag will decide next Thursday on a new program to stimulate the economy, which includes, among other things, expanded tax depreciation options for machines and electric vehicles. This program aims to encourage investment and is expected to lead to a reduction in corporate tax from 2028. Nevertheless, the plans have far-reaching financial consequences as they will lead to a significant loss of revenue for the federal, state and local governments. Loud BR24 The total damage is estimated at around 48 billion euros, with municipalities losing 13.5 billion euros, the states losing 16.6 billion euros and the federal government losing 18.3 billion euros.

The situation poses major challenges for highly indebted municipalities, which urgently demand financial compensation from the federal government. The Prime Minister of Mecklenburg-Western Pomerania, Manuela Schwesig (SPD), has already indicated partial compensation, while the main goal remains full compensation for the affected municipalities. Saxony's Prime Minister Michael Kretschmer (CDU) emphasizes that important questions regarding the relief of states and municipalities still need to be negotiated, although these clarifications should ideally take place before the Bundestag decision.

Financial support and long-term solutions

In order to avoid delays in the Mediation Committee, the aim is for the law to be forwarded to the Bundesrat as quickly as possible after the Bundestag vote. The Federal Council has the last word on July 11th. Possible solutions for financial support for municipalities include, for example, a higher share of the states in sales tax and state aid for climate change programs or renovation projects. The CDU prime ministers are calling for a permanent mechanism for automatic compensation for federal laws that lead to increased spending or reduced revenue.

In this context, the working group is also mentioned, which is supposed to develop a solution proposal by December. Thuringia's Prime Minister Mario Voigt (CDU) is in favor of a fundamental solution to clarify financial relationships between the federal and state governments.

Federal budget 2024 in focus

Parallel to these developments, the 2024 federal budget was decided, which has a volume of around 476.8 billion euros, 3.4% more than in the previous year. Like on the Federal Government It is reported that Germany remains true to the debt rule despite high investments. A significant focus of the budget is on social justice, economic incentives as well as climate protection and international cohesion. Among other things, 58.5 billion euros are planned for future investments.

The planned investments focus on several areas: microelectronics, electromobility, broadband expansion and social housing, to name just a few. In addition, tax relief of 15 billion euros is sought for 2024, especially for medium and low incomes. The planned measures also include an increase in citizens' money and numerous programs to support socially disadvantaged groups and to modernize buildings to make them more energy efficient.