Crisis in Western Pomerania-Greifswald: 100 million euro deficit threatens!

Crisis in Western Pomerania-Greifswald: 100 million euro deficit threatens!

The alarm bells have sounded in Western Pomerania-Greifswald: The district council has urgently appealed to the state government of Mecklenburg-Western Pomerania to avert an impending budget deficit of 100 million euros. This urgent request was accepted without any dissenting votes and is intended to secure the municipal ability to act in the long term. The district administrator is now responsible for working to relieve the financial burden on municipalities and passing on the district council's interests to the municipal umbrella associations, reports Northern Courier.

The challenges are enormous: forecasts indicate significant declines in revenue from 2026, while spending in social areas will continue to rise. In this critical situation, there are demands for a sustainable reduction in municipal financial burdens and a revision of the Financial Equalization Act. Specifically, an increase in the infrastructure allowance from state funds to 150 million euros is required in order to stabilize the financial basis of the municipalities.

Alarming financial situation of the municipalities

Looking at the decades 2014 to 2020, municipal funding increased nominally by an average of 2.0% annually. The background to this positive development is the increase in the property transfer tax rate and various state programs that are primarily aimed at financially weak municipalities. Nevertheless, the financial situation of many cities and municipalities is made even more difficult by a variety of requirements from state and federal laws, such as State government executes.

In 2014, the municipalities' negative financing balance was still 10.2 million euros, which was mainly due to debt reduction and the repayment of trade taxes. However, positive financing balances were forecast from 2015 onwards, supported by increasing tax revenues and special aid from the state.

An appeal to the state government

The district council of Vorpommern-Greifswald has made it clear that without fair funding, the municipalities' ability to fulfill both mandatory and voluntary tasks is at risk. The planned deficit of almost 100 million euros in 2026 could put a lasting burden on municipalities and massively limit their ability to act in social areas.

However, a proposal to reduce the district levy in order to create additional financial flexibility was rejected by the Ministry of the Interior. Against this background, negotiations between the state and the municipal umbrella associations are more important than ever in order to sustainably improve the financial framework and make the municipal infrastructure, which, according to the report, has an investment gap of over two billion euros, future-proof.