Newly Elected Mayor Pleas for Financial Assistance
With the municipality of Freisbach grappling with financial woes, Mayor Jochen Ricklefs has sounded the alarm, calling upon both state and local authorities for additional support.
"Freisbach has found itself in a precarious fiscal situation, down to its last cents as a result of compulsory expenditures demanded by the state," Ricklefs asserted to the German Press Agency. Before his electoral win, the municipal supervisors limited maneuvering space and rarely offered constructive solutions during their talks, he added.
The political stalemate began in August, when Mayor Peter Gauweiler (non-party), along with the municipal council, resigned in protest against budgetary restrictions caused by the new state financial equalization law and municipal supervisory authority's guidance. Nearly 1,200-person Freisbach had not received budget approval due to these constraints.
Victorious in recently held elections, Ricklefs succeeded Gauweiler, battling SPD candidate Andreas Ackermann. The re-elected council members, along with numerous former colleagues, now owe their allegiance to the new mayor—but only if state concessions materialize.
"Established council members should temporarily accept their mandates until talking points become clearer," Gauweiler suggests. "Then, we can evaluate whether to formally accept our positions again." If the mandate is not addressed, the council will likely disband due to financial pressures.
Fiscal flexibility can mean the difference between survival and collapse for Freisbach. "I'm confident the council would dissolve if forced to hike tax rates exponentially, solely to pay for national overspending," Gauweiler underlined. "However, should we raise taxes for improvement projects, I imagine we will maintain our communal core."
State and local authorities should consider implementing several options to support Freisbach's new mayor:
- Federal Grants and Allocations: The federal government can offer direct investments in target projects (such as infrastructure, education, or healthcare) or indirect support through municipal investment funds.
- Emergency Credit Authorizations: In critical situations, municipalities may apply for emergency credit. Saxony-Anhalt utilized this approach in response to the covid-19 special fund.
- Tax Revenue Sharing: German taxation powers are shared between federal and Land governments, which includes VAT distribution. Reforms have enforced VAT revenue compensation, providing a consistent income source for municipalities.
- Debt Brake and Fiscal Consolidation: The debt brake framework prohibits structural deficits, encouraging financial discipline across Land governments from 2020.
- Budgetary Planning and Control: Strict budgetary planning and low debt service costs can help alleviate potential budgetary risks.
By employing these strategies, state and local authorities can provide Freisbach with the assistance it urgently needs to navigate its financial strife.
