Districts in Saxony-Anhalt Sounds Alarm Following Financial Turmoil
In the aftermath of a financial dispute in Mansfeld-Südharz, the Association of Districts in Saxony-Anhalt has issued a stern warning. "This is a blow to the foundations," said Heinz-Lothar Theel, the Managing Director, speaking to the German Press Agency. The financial stability of administrative districts is now at risk, he added. As a result, dialogue with the state is essential to secure the districts' funding.
The district of Mansfeld-Südharz revealed on a Friday that it would need to seek emergency financial aid from the state. This move was prompted by a court loss in the dispute over the district levy. Consequent to the loss, the district reported missing out on a staggering 157 million euros, as the district administrator, Andre Schröder (CDU), revealed. The reduction in the district levy from now onwards means the district no longer has the financial means to carry out its legal responsibilities, as Schröder pointed out.
The municipalities belonging to the district contribute financially to the district's operations, through the district levy. Several municipalities took legal action against the amount of this payment and emerged victorious in the Halle Administrative Court in June 2023. Subsequently, the Saxony-Anhalt Higher Administrative Court declined to hear the district's appeals against these rulings.
The repercussions of this court ruling could be far-reaching for municipal funding across Saxony-Anhalt. As per Schröder, the judges have deemed the levy unlawful under the circumstance where a quarter of the municipalities consistently run budget deficits. For this reason, the district levy in Mansfeld-Südharz is to be scaled back for 2023 and 2024. Additionally, adjustments are to be made for previous years as well.
Given the number of struggling municipalities in Saxony-Anhalt, other regions may also be impacted by this financial crunch. Warning of a potential threat to the financial resources of districts, Theel declared that the Association would need to take legal action against the Financial Equalization Act if the issue wasn't addressed.
Just last week, the state parliament passed an overhaul of the Financial Equalization Act. From 2024, local authorities in the state would receive a total of an additional 249.6 million euros from the state, with 126.6 million euros reserved for districts. However, Theel believes this wouldn't help resolve the district levy issue. The funds would need to be channeled towards covering the increased expenditure on refugees, citizens' benefits, and other social services.
Further reading:
- Amid this financial upheaval, the County Council, which represents the Association of Districts in Saxony-Anhalt, expressed concerns regarding the potential impact on all administrative districts.
- The district's financial distress might also affect municipalities within Mansfeld-Südharz, like Sangerhausen, requiring the district to seek financial assistance from the state.
- According to the German Press Agency, Heinz-Lothar Theel, the County Council's Managing Director, expressed apprehension, stating that the financial resources of administrative districts were under threat due to these budgetary strains.
- Andres Schröder, the CDU's district administrator, in Manfeld-Südharz acknowledged the substantial financial shortfall that followed the court ruling, which cost the district 157 million euros.
- With the district levy falling under the purview of the municipalities in the district, a potential reduction in payments may necessitate re-evaluations and budget adjustments across Saxony-Anhalt.
