„Cities cannot close the gap alone,” says Markus Lewe, Vice-President of the German Association of Cities and Mayor of Münster in an interview with SWR-Aktuell. The municipalities lack the necessary financial resources. The German Association of Towns and Municipalities also knows that a bailout is needed for 2021 and 2022.
9 billion in tax revenue will be missing from the coffers of the municipalities this year and next year. This is the assumption of the German Association of Cities. But it is precisely at this time that financial resources are all the more important to solve the effects of the pandemic on the ground. The German Association of Cities is therefore calling for the federal government to compensate for the shortfall in tax revenues. The Federal Minister of Finance, Olaf Scholz, has so far said “no”.
For the municipalities, which are accompanying people through and out of the pandemic, this answer could have serious consequences: They are threatened with the cancellation of voluntary services that are so groundbreaking for the future. Especially the support of sports clubs, holiday and leisure activities and the cultural scene are important for families and children who have suffered most from the pandemic.
You can listen to the SWR interview with Markus Lewe and presenter Andreas Böhnisch here.
Securing future benefits
Last year, not only the federal government helped out the cities and municipalities, but the states were also very cooperative. The municipalities expect the same in the future, especially since the legal entitlement to primary school care will again generate costs that are the responsibility of the cities and municipalities. The principle for the distribution of financial burdens is actually “he who orders, pays”.
The uncertainty remains
In a position Paper, German Association of Towns and Municipalities also calls for a second bailout and underlines the importance of municipal investments as an economic driver. According to the paper, municipal investments account for about two-thirds of the state’s total investment activity.
Will there be another decision on the bailout fund before the federal election? Probably not. It remains to be seen to what extent the new government will respond to the demands of the German Association of Cities and Towns and the German Association of Municipalities.