The Hessian one State Parliament has approved a supplemental budget for 2025 and equalization of city finances. The CDU and SPD government factions approved both laws. The opposition voted against it twice in Wiesbaden.
The background to this additional budget is the easing of the national debt brake. This country can do this Hesse will take out additional loans of 1.115 billion euros for the current year. The lion’s share of these funds should go to reserve funds – a point that has been sharply criticized by the opposition.
More funding for city governments, university hospitals, and teachers
Additional funds of 300 million euros were allocated as emergency aid for often cash-strapped cities, 200 million euros for the state-owned Frankfurt University Hospital, and 20 million euros for teachers in view of the increasing number of students.
Municipalities were to be informed of the amount of money they have for free use in a so-called ministerial letter on Friday (14 November). Minister of Finance Alexander Lorz (CDU) explained that as soon as the supplementary budget is officially announced in the coming days, city governments may also disburse their emergency aid.
Minister of Finance: Two billion euros in tax revenue was lost this year
Lorz reiterated: “This kind of situation is new for the Federal Republic: The bottom line is that we have not experienced economic growth across the country since 2019.” This puts public budgets under pressure. “For this reason alone, Hesse loses around two billion euros in tax revenue every year,” the minister explained.
The municipal financial equation, which was also approved, regulates financial relationships between the state as well as counties, cities and municipalities. According to the Ministry of Finance, around 7.4 billion euros will be given to municipal governments in 2026 – and around 7.5 billion euros in 2027. While the state takes care of security, education and law, municipal governments are responsible for schools, water supply and firefighting, for example.
Criticism of the opposition
There was a lot of criticism from the opposition. FDP budget expert Marion Schardt-Sauer, for example, spoke of an additional budget “to weaken budget discipline”. According to the FDP, the fact that 500 million euros must be channeled into reserves through loan financing is unconstitutional. Loans are allowed to cover actual deficits, but not for reserves, i.e. as a precautionary measure.
© dpa-infocom, dpa:251113-930-289987/1
