Several major parties in the Bundestag received a visit from a donkey on Monday, October 11. The beast of burden could be seen larger than life on a cart, carrying enormous sacks on its back, which brought it to its knees. The cart stopped in front of the parties' headquarters during the course of the day. Alongside the donkey were several mayors and mayors who symbolically handed the party representatives a stone from the bag of burdens. In doing so, they emphasized their demand for better financial support for disadvantaged cities and districts.
Offenbach's city treasurer Martin Wilhelm welcomed this campaign, which was initiated by the alliance "For the dignity of our cities". As part of the alliance, the city of Offenbach supports all campaigns calling on the federal and state governments to secure the financial resources of local authorities in the long term: "We are suffering from the enormous burdens caused by the unfair distribution of funding between the federal and state governments," emphasized Wilhelm. "As city treasurer, I am fighting for the federal and state governments to finally provide sufficient funds for the laws they have passed, including for the city of Offenbach. This includes the full assumption of accommodation costs. He who orders, pays! - this self-evident fact must finally be implemented."
The alliance brings together 70 municipalities that are particularly affected by the financial distribution in Germany. Due to decades of structural change, they are experiencing problems that are also being felt in Offenbach: a considerable loss of jobs, a decline in tax revenues and constantly rising expenditure on children, youth and social welfare. "In Offenbach, we are also working hard to increase our own income in the long term by attracting companies. However, we cannot solve the structural underfunding on our own: If the federal and state governments were to pay for their own laws, Offenbach's budget would be in the black and we would have significantly more money for voluntary services. But as long as we have to bear a considerable part of the costs ourselves, we will continue to fight for a fair distribution of finances in Germany," continued Wilhelm.
The visit of the packhorse to the Berlin party headquarters was linked to four demands:
Fair financial distribution
The federal and state governments can allocate tasks to the municipalities and determine what financial compensation they receive. However, expenditure is higher and is driving local authorities into a debt trap. The federal and state governments must finally treat disadvantaged cities and districts fairly when it comes to costs.
The federal government must ensure adequate funding for the tasks of childcare and inclusion, which it stipulates by law. In order to absorb the dynamics in this area, a consistent focus on case numbers is necessary.
To combat child poverty, basic income support for children must be introduced. The basic income support must both ensure an adequate minimum subsistence level and bring about a consolidation of the many different benefits. This would help to alleviate social problems in families and could also indirectly relieve the burden on child-raising assistance.
The local authorities continue to be the last resort when it comes to problems with care financing and thus also cover a financial need that arises from poverty in old age and are responsible for the problems of an ageing society that have so far been inadequately solved within the framework of care insurance.
Solution to the old debt problem
The unfair distribution of finances has forced many municipalities to take out loans and incur debt. This is why the disadvantaged municipalities have to take care of interest and repayments, while the wealthy municipalities can invest in their future. The federal and state governments must take on some of the old debts so that the gap between the municipalities does not widen.
The reduction of old municipal debts must be brought about as part of an overall solution based on solidarity and close cooperation between the federal states, the federal government and the municipalities. The problem of old debts continues to burden the financially weak municipalities in North Rhine-Westphalia and Rhineland-Palatinate.
In view of the new debts arising from the pandemic, the issue of old debt must be expanded. Financially weak municipalities in particular will emerge from the crisis with higher burdens due to their lower resilience and will take longer to work them off again. This is likely to further increase the disparity between municipalities. Given the low interest rates, there does not appear to be any direct pressure on budgets at present. In the medium term, however, interest rates are expected to rise, especially as there are also risks on the financial markets (for example due to inflation or the formation of bubbles).
Note from the City of Offenbach: The state of Hesse has largely solved the problem of old debts via the Hessenkasse. However, 69 percent of the funds for debt relief come from the municipalities themselves. Mayor Dr. Felix Schwenke commented on this in summer 2020 at a virtual municipal conference of the Action Alliance:
In November 2019, Lord Mayor Schwenke also held a personal meeting with the former Minister of Finance and candidate for Chancellor, Olaf Scholz, to discuss the situation of the City of Offenbach:
Enabling investments through real support programs
Due to the austerity measures of the past decades, there is a great need to catch up on investments. There are numerous funding programs for local authorities. In most cases, however, they lack the staff to apply for the programs and the own funds that are a prerequisite for funding. The municipalities need help by reducing their own contributions. The disadvantaged municipalities also need continuous investment funding.
Close tax havens
The dilemma of disadvantaged cities and municipalities becomes particularly clear when it comes to municipal tax rates. In view of high social expenditure and disproportionately low revenues, they are forced to increase their assessment rates. Other municipalities, on the other hand, can engage in tax dumping. They take advantage of the opportunities for structuring trade tax and have persuaded companies to relocate. The federal government must therefore remove the basis for ruinous tax havens in tax law.
The campaign alliance "For the dignity of our cities" already drew attention to the enormous burdens on local authorities and the demand for a fair restart in summer 2021. The mayors took to Facebook and Twitter to describe the challenges facing cities and districts and how the federal and state governments could ease the burden. The alliance's website documents the promises made by the parties to the municipalities during the federal election campaign. The campaign in Berlin on Monday also reminded people of this.