Havelland in the financial crisis: cash credit increased to 70 million euros!

Havelland in the financial crisis: cash credit increased to 70 million euros!

The financial situation of the municipalities remains tense, and this also affects the Havelland district. At a district summer reception, District Administrator Roger Lewandowski (CDU) spoke about the growing challenges for public budgets. He made it clear that the situation was not only problematic locally, but also nationwide. “Something is important,” as the district administrator emphasized, pointing out that the financial difficulties in many municipalities are becoming increasingly obvious. What is particularly alarming is that an emergency decision to increase the cash credit was made two days before the summer reception.

The cash loan rose from 27 million euros to a whopping 70 million euros in order to secure current budget obligations. This measure is intended to ensure that social benefits can continue to be paid out after the financial situation was jeopardized by a lack of income in the emergency services. “We needed a good hand to make this decision,” said Lewandowski, who is optimistic about the future, despite all the adversities.

The entire financial situation is under pressure

The municipal finance report from the Bertelsmann Foundation follows a similar trend, which finds that the Corona crisis and the subsequent recession have caused a deficit of at least 17 billion euros in German municipalities. Trade tax revenues fell by almost 9 billion euros. This has particularly hit economically strong regions where tax losses amounting to millions are to be complained about. Aid from the federal and state governments amounts to almost 11 billion euros, but municipal finances are still in jeopardy. Cities in North Rhine-Westphalia, Rhineland-Palatinate and Saarland, where high cash loans dominate, are particularly affected.

And the trends continue: A report from the Federal Statistical Office shows that the municipal financing balance fell from a surplus of 2.6 billion euros in 2022 to a deficit of 6.8 billion euros in 2023. Verena Göppert, deputy general manager of the German Association of Cities, warned of the inevitable deficits in the coming years if nothing changes in finances. “In order to support the municipalities, a fundamental overhaul of the financial resources is required,” she said recently.

Challenges and future outlook

District Administrator Lewandowski called for more freedom of action from representatives at the state and federal level by reducing bureaucracy and providing municipalities with adequate financial resources. In this context, the upcoming negotiations on the district budget in the fall are of great importance, as the district's financial politicians have to face this challenge. Despite all the adversities, there are also bright spots: the municipalities were able to generate a surplus in 2020 and reduce cash loans, which is encouraging for the future.

With increased cash credit, the Havelland district is now at a crossroads. The challenges are enormous, and it will be all the more important to inform citizens early about possible restrictions and necessary measures. Because, as the district administrator summed it up: “We have to take the situation seriously and deal with it responsibly.”