Draft of the 2021/22 double budget presented

On Wednesday, the city administration of Jena presented its draft of the 2021/22 double budget. Lord Mayor Dr. Thomas Nitzsche and Head of Finance Benjamin Koppe explained the difficult path to a budget in a press conference.

Difficult starting position

The initial financial situation is particularly tense due to the coronavirus-related decline in income. Since September 2020, a working group of the finance committee has been working with the municipal financial administration to develop a budget protection concept. The reduction in the city's voluntary services contained therein led to an intensive discussion among the population and in the city council.

An amendment to the Thuringian law on municipal double-entry accounting (ThürKDG) by the Thuringian state parliament now makes it possible to approve the municipal budget without a budget protection concept. According to Section 40 b (3) ThürKDG, this is only possible on the condition that "all savings opportunities are exploited in the budget bylaws, all income and payment opportunities are exhausted and proper budget management can be assumed in the financial planning period."

Mitigated savings proposals

This path is now being followed with the present draft of the double budget. This has made it possible to mitigate the proposed cuts. Nevertheless, essential consolidation measures are still included in order to enable sustainable budget management in the coming years.

Important demands of the city council have been implemented: A total of 1.4 million euros in 2021 and 2.4 million euros in 2022 have been removed from the savings list. This means that, above all, funding for civil society initiatives and associations that promote openness and tolerance, social cohesion and social and cultural issues will remain unchanged. Increases in property tax and daycare and after-school care fees are also to be avoided, as are cuts to the JenaBonus.

Lord Mayor Dr. Thomas Nitzsche commented: "The city's financial problems have been building up for years. Without Corona, we would have balanced the situation without major cuts. Now, in addition to dealing with the pandemic itself, we also need to find an answer to the resulting budget issues. This double budget takes into account the discussions in the city council and among the general public. It safeguards social and cultural life, while at the same time maintaining a sustainable fiscal course. I am convinced that a compromise has been found with this proposal that can be supported by a broad democratic majority in the city council."

Consolidation measures amounting to 5.2 million euros for 2021 and 4.6 million euros for 2022 remain included in the double budget. This is essential for stable budget management.

Many unknown factors in the future

Head of Finance Benjamin Koppe points out the many unknowns in the financial planning: "It is much more difficult to forecast our city's revenue situation than in previous years. It is true that Jena's economy is robust and well equipped to withstand crises due to its diversity. A reliable estimate of expected taxes is a major challenge due to the unclear effects of the coronavirus pandemic. We will therefore take a close look at the budget until the end of 2021 and are keeping all options for readjustment open."

The corona-related budget problems show the vulnerability of the city of Jena - like all German municipalities - to external shocks. For this reason, a point was included in the draft resolution that stipulates an assessment of the city's resilience to the climate crisis, pandemics, disasters and unstable economic, social and political conditions for future budget planning. This is intended to improve the assessment of the level of risk provisioning within municipal financial planning.

City Treasurer Martin Berger sees the double budget presented as a rational decision that maintains a very good quality of public services and forms the basis for the stable development of an up-and-coming city.

The paper is now undergoing political discussion and is to be adopted at the March meeting of the city council on March 24, 2021.