- Budget planning under uncertain conditions
- Double budget secures financial framework for action for a longer period of time
- Investments in digitization and ecology/climate protection
The Lord Mayor presents the draft of the 2023/24 double budget to the Jena City Council in its December meeting. This planning must succeed under highly uncertain framework conditions and with risk areas of previously unimagined proportions. With a double budget, the city can nevertheless achieve as much planning security as possible and pass it on to those who provide services for the city. By having an already approved twin budget at the beginning of 2024, positions can be filled, voluntary services provided and investments implemented with certainty.
Budget planning flanked by two areas of risk.
On the expenditure side, there is the risk of inflationary price trends in general and in particular the veritable explosion in energy prices. There are also major risks on the revenue side and in some cases on the expenditure side due to the fear of a recession. Tax revenues in particular would suffer a massive slump. The Federal Ministry of Finance's press release on the fall 2022 tax estimate states: "The current estimate results are characterized by a high degree of uncertainty. The risks for economic development are high, especially with regard to possible bottlenecks in energy supply in the coming months."
The measures identified in the "Jena Stress Test" study to strengthen the city's resilience to external crises and shocks are already being implemented in part in ongoing measures and are to be systematized and financially mapped by the next budget preparation for 2025/26.
Investing in the future viability of the city: digitization and climate protection.
The priorities of the draft budget are digitization and climate protection. Here, spending is significantly increased compared to the current budget. Spending on IT and the implementation of eGovernment tasks will increase by almost 30 percent in 2023 and by another 20 percent in 2024 compared with the previous year. In addition, start-up funding will be provided for the new IT control center. Additional funding of €1 million is provided for climate protection .
Voluntary services can be maintained at the same level
At the same time, it is possible to maintain voluntary services in the youth and social sectors, for culture and sports, and also not to reduce the quality level of the legally required official tasks. However, there are no plans for additional improvements in these areas in the double budget.
Details of the budget planning - figures and data
In 2023, the city of Jena is planning expenses of €406 million. This is offset by revenues of €390 million. The result is a deficit of € -16 million. In 2024, expenses of €424 million will be offset by revenues of €395 million. The result is -€30 million.
Based on the fall 2022 tax estimate , a plus of €15 million can be expected in 2023. The state allocations in the municipal fiscal equalization scheme will improve by around €13 million. The positive trend will continue in subsequent years, albeit at varying levels.
On the other hand, the previous income from profit distributions by the municipal utilities will cease. All municipal companies are under great economic pressure due to inflation, the energy crisis and high investment requirements. The aim is for each company to be able to perform its tasks under its own steam. However, it may become necessary for the city to provide guarantees and sureties for areas of responsibility of the municipal utilities.
The investment level of the city of Jena remains very high. The core administration and municipal utilities will invest a particularly high sum of €83 million in 2023 due to the stadium project and the construction of the new library, and around €65 million per year thereafter. This is significantly higher than the level generated in current business and required simply to maintain the existing stock. Infrastructure, cultural and sports facilities will be significantly expanded .
For these reasons, a significant reduction in existing liquidity is assumed in the planning, which allows the period 2023/24 to be represented. For the period thereafter, it may be necessary to take out additional investment loans. In the medium-term planning, it was assumed that the ban on new borrowing in the main statutes would be abolished and that borrowing would total €46 million in the years 2025 to 2027. This would not have to be decided and approved for another two years.
Finally, the high uncertainties surrounding the planning must be emphasized once again. It is even less possible than in the past to finalize all details for one or two years. Therefore, the city of Jena needs greater flexibility in execution, among other things in the form of an amendment to the rules of procedure of the city council. If necessary, a supplementary budget may also become necessary, but even then the areas of responsibility not affected by this can take advantage of the planning security of a double budget.