“We finally managed to swim free”

Mr. Murrack, the NRW City Association is currently preparing a municipal constitutional appeal. Duisburg supports the recurring independent cities of Bonn, Bottrop, Dortmund, Düsseldorf, Cologne, Münster, Solingen and Wuppertal. Put simply, these are unequal treatment between independent cities and municipalities belonging to districts resulting from the newly developed Municipal Financing Act 2022. What is it about in detail?
Our critique of the Municipal Funding Act 2022 concerns two points. On the one hand, we take care of crediting the matching funds for the NRW rescue package. We must expect that the country will take back the funds and that the repayment will entail a considerable burden in the coming years. On the other hand, it is about the introduction of differentiated fictitious valuation rates, and this is what the constitutional complaint refers to. The state imposes higher tax rates on property tax and trade tax on urban districts than on municipalities belonging to the districts. It justifies this step by the fact that urban districts can afford higher evaluation rates than smaller municipalities. However, not only the city of Duisburg, but also a large number of financially weak independent cities have already had to raise trade and property taxes as part of the strengthening pact. These cities have been and are extremely affected by structural changes, the social consequences and the resulting severe financial difficulties. That is why it cannot be said that we can afford higher taxes, but that we have been forced to raise taxes, which greatly reduces the attractiveness of these cities. Therefore, the reasoning of the report and the corresponding weighting in the GFG should indeed be reversed.

What amounts are involved?
In total, it is about 119 million euros. In Duisburg it will be 5.5 million euros in 2022. From 2023 we expect a burden of 10 million euros. This hits us hard. Over the past five years, we have reduced cash advances by € 800 million. By the end of the year, we wanted to finally have overcome our budgetary over-indebtedness and have our financial resources at our disposal in the next year without the conditions of a budgetary security concept. We were finally able to swim free.

What prompted the state government to implement this reform? Had the municipalities belonging to the district asked for such a step? Is there discord in the community family?
No, I’m not aware of it. The district council and the association of cities and municipalities are still holding this issue. For me there is no sign of division between countries that are independent of a district and countries that belong to a district. When it comes to accrediting, we all get together anyway. On the contrary, I have the impression that the state government wants to do local communities a favor before the state elections in May. Something like this wouldn’t be entirely unusual. The Strengthening Pact was an initiative of the then red-green state government – in support of independent cities – but less as a redistribution tool than as a temporary aid for self-help. Here we are dealing with a long-term redistribution mechanism. And: With a conservative state government, rural areas tend to benefit more and more. These are rituals against which we are powerless.

How do you evaluate your chances of a solution to old debts? NRW interior minister Ina Scharrenbach announced a solution two years ago. At NRW.Bank’s municipal financial market forum, she stressed in January that the state would hold talks with the federal government on this. There is a solution?
In my view, the old debt regulation agreed in the state-level coalition agreement is out of the question. Rhineland-Palatinate, Saarland and Hesse have found solutions for their old debt-stricken municipalities. As far as I know, there was also a concept for NRW municipalities, but the state government could not agree on it. Before the state elections, nothing more will happen with certainty in this matter. We will have to wait and see what comes next.

After decades of structural budget deficits, it should now also be about investing in the future of the city of Duisburg. Do you feel up to the challenges involved?
Unfortunately no. We have huge problems within the administration because in recent years we have had to lay off a lot of staff due to the pressure to consolidate. This is why we particularly lack employees who have the building skills needed for investment projects. To be able to carry out our many new school building projects, we now need to create a school building company. But even with such creative measures, our operational scope is limited.

So now you are taking legal action and opposing the country. But it will probably be a long time before the constitutional court makes its decision, or do you think it will be a quick success?
The cause must be prepared in the coming months and presented before the elections. I think it will work that way too. However, the process will likely take a year or two. In this sense we will need some perseverance. In general, however, I would like to remind you that the federal contribution to housing costs (KdU) has helped us a lot and gave us some respite. We just need to use the means at our disposal to reduce our old debts as much as possible instead of doing something useful with them. Inequality between cities will therefore increase in the coming years and differentiated fictitious valuation rates will exacerbate this trend again.

v.wilke@derneuekaemmerer.de

Leave a Comment