Despite better tax estimate, Jena remains in the red

Jena's head of finance Benjamin Koppe is currently expecting an improvement in the forecast budget result of around 10 million euros per year for the years 2022 to 2025. He gave this figure as the result of the regular review of the budget situation. The report was discussed at the last meeting of the Finance Committee and will be presented to the City Council at its first meeting in the new year.

"Unfortunately, we are still in the loss zone with the updated budget forecast and show a medium-term deficit of an average of almost 8 million euros per year," Koppe limits with regard to an overly optimistic expectation of a sustainable improvement in the financial situation of the city of Jena.

A budget protection concept would not be needed according to the current status with the budget discussion in the coming year. However, due to the remaining losses, it would not be possible to incur additional expenses compared to the approved budget for the years 2021 and 2022.

The improvement is based entirely on the results of the November tax estimate and the new regulations on municipal financial equalization. The expenditure side, at just under €400 million annually, is almost unchanged. The forecast trade tax revenues alone will increase by about 9 million euros per year compared to the previous planning, for the current year 2021 even by almost 20 million euros. This brings the forecast trade tax to 84 million euros in 2021 and 77 million euros in 2022.

Finance Director Benjamin Koppe points out that this is precisely where the greatest financial risk lies. With fluctuations of up to 30 million euros from year to year, trade tax is the city's most uncertain source of revenue. The November tax estimate was also prepared before the outbreak of the fourth wave of corona, he said.

"The situation is highly volatile due to the pandemic and it is impossible to know today which way the pendulum will swing in the coming months. Unfortunately, we must expect the May 2022 tax estimate to be significantly worse. This will be the planning basis for a double budget in 2023/24. Only then will we be able to assess whether the topic of a 'budget protection concept' can really be shelved."