Karlsruhe raises budget lock: Hope for financial recovery!

Karlsruhe raises budget lock: Hope for financial recovery!

Karlsruhe, Deutschland - Karlsruhe faces a significant step in municipal financial policy: The city plans to remove the budget lock introduced in February 2023. This measure was the result of the weakening economy in Germany, which led to declining tax revenue. The original deficit of 44.8 million euros, which was estimated in the urban budget, was increased by a new tax assessment by a further 50.1 million euros, which resulted in the need for the budget lock to secure the budget equalization, such as [bnn.de reported] (https://bnn.de/karlsruhe/Karlsruhe-stadt/Karlsruhe-will- Hausstersperre-jetzen-Wieder-Aufhiften).

The lock is to be canceled in June 2023, subject to the approval of the local council to a comprehensive financial package of around 51 million euros. The decisive vote on the savings package is scheduled for June 24, 2023 after the Pentecost holidays. This could be an end to the strict savings rules in the city. Because since the introduction of the lock, all urban offices and departments have to save a total of 15 million euros to reduce the deficit.

focus on culture and social area

A particularly sensitive topic in this discussion is the social area, which is initially spared reductions. Instead, the culture focuses on the saving measures. The proposal stipulates that institutional funding for cultural institutions reduced by 1.3 percent, which could bring savings of 559,160 euros for 2025. The city does not want to endanger its cultural landscape, but at the same time reduce financial pressure.

In addition, the transport service for severely disabled people in the amount of 180,000 euros and the “garden dreams” competition with 20,000 euros is taken into account as possible savings. The city's focus is to maintain the services for the citizens in the best possible way without neglecting culture.

savings and future prospects

The present forecast for 2025 shows a minus of almost 46 million euros that is approved - an occasion to rethink the plans. Negative forecasts are also expected for the 2026/27 double budget, so that annual savings of 80 million euros are necessary. The mayors were commissioned to develop further savings proposals that are to be discussed in September 2023 to get the city's budget under control.

The possibility of increasing basic and trade taxes is rejected by the mayor of the financial, which makes the debate about alternative financing channels and savings even more exciting. The city administration stays with the rod and is considered to restore the local council's ability to act. The previous austerity measures have already clearly outlined the problem areas that have to be edited in order to get the urban budget back into the solder. Finally, also contractually defined expenses and those with legal entitlement that are not affected by the budget lock, as [karlsruhe.de emphasizes] (https://www.karlsruhe.de/stadt-rathaus/aktuelles/meldungen/haushaltSperre-er-

The coming months will be crucial for the financial health of the city of Karlsruhe. It remains to be seen whether the cancellation of the budget lock is successful and what measures are actually implemented. In any case, it shows that economic foresight and innovative housekeeping are necessary to bring the city to the right course.