Financial equalization (Germany)

from Wikipedia, the free encyclopedia

Under revenue sharing is the process in the financial condition of the Basic Law (GG) regulated financial constitutional order and distribution system to financial relations in the form of spending and revenues between the authorities has to content. In particular, this means the distribution of tax revenue from the federal government to the states and from these to the municipalities .

species

A distinction is made between primary and secondary as well as horizontal and vertical financial equalization . In the case of primary compensation, the tax income to be transferred is allocated by law , whereby it is precisely regulated who receives which tax portion. The secondary financial equalization then regulates the tax redistribution according to certain keys in order to avoid hardship of the primary equalization. The horizontal financial equalization concerns the equalization of several equal units among each other (state / state), while the vertical one takes place between superordinate and subordinate regional authorities (federal / state, state / municipalities). This distribution system can be found in the GG for the individual types of financial equalization:

Art vertical financial equalization horizontal financial equalization
primary financial equalization Art. 106 para. 3 + 4 GG Art. 107 para. 1 GG
secondary financial equalization Art. 107 para. 2 sentence 3 GG Art. 107 para. 2 sentences 1 + 2 GG

This results in the following systematic combinations. The primary / vertical financial equalization determines the federal / state income allocation, while in the primary / horizontal financial equalization there is a basic division of state taxes (plus state share of income and corporation tax) among the states. With the secondary / vertical allocation, the federal government can distribute additional federal allocations to the financially weak states, while the secondary / horizontal financial allocation provides for a limited tax redistribution among the states to balance the different financial strength of the states after the primary / vertical income allocation.

In addition to this active financial equalization, there is also a passive financial equalization , which consists of the distribution of public tasks to the individual responsible authorities . According to the judgment of the Federal Constitutional Court of December 1974, public tasks mean “those tasks which the community has an increased interest in fulfilling , but which are of such a nature that they can neither be effectively carried out on the basis of private initiative, nor in the narrower sense State tasks count which the state itself has to perform through its authorities ”. In the federal system, not all public tasks are carried out by the federal government; for example, it allows subordinate public administration bodies to perform public administrative tasks within the framework of contract management . However, through this delegation, he also shifts the costs of performing the tasks to these subordinate bodies. In the context of the principle of connectivity , the area performing the tasks also bears the costs, which the delegating area is entitled to reimburse ( Article 104a, Paragraph 2, Basic Law). This ultimately results in active financial equalization.

Vertical financial equalization

The primary / vertical financial equalization determines which taxes or shares of tax revenue are due to the federal and state governments. In the case of secondary / vertical equalization, the federal government can distribute additional federal allocations to the financially weak states.

Horizontal financial equalization

The horizontal compensation has the task of correcting the results of the primary tax distribution among the federal states, insofar as they appear inadequate, also taking into account the statehood of the federal states from the federal idea of ​​the solidarity community, the allied standing for one another. The federal principle is both the basis and the limit of the duty to provide assistance. In addition, the financial equalization is the essential material basis for the fact that insolvency proceedings according to Section 12 of the Insolvency Code are inadmissible at the federal, state and local levels as well as at most institutions and corporations under public law ( insolvency inability ). This relieves their creditors of the insolvency and repair risk of their claims. This, in turn, is the basis for the municipal credit of the credit institutions . The secondary / horizontal financial equalization regulates the tax redistribution among the countries to compensate for the different financial strength of the countries.

Municipal financial equalization

The municipal financial equalization ensures in Germany the municipalities and municipal associations in accordance with Art. 28 para. 2 Basic Law the financial basis of their self-government . To this end, the states regulate the distribution of state funds to the municipalities and the redistribution of funds between the municipalities in their own state laws . The structure of the municipal financial equalization differs greatly between the countries.

According to Article 106 (7) of the Basic Law, the states must pass on a percentage of the community taxes due to them to the municipalities. The level of this share is determined by state law. Is intended the local level to the tax revenues of Confederation to participate and countries and to enable the municipal task fulfillment.

The municipal financial equalization pursues the goal, similar to the state financial equalization , on the one hand to ensure the balance between the state and its municipalities (vertical financial equalization) and on the other hand the balance between different financially strong municipalities (horizontal financial equalization). In the case of vertical financial equalization, the different financial strength of the individual municipalities must be taken into account (example: loss of own income, e.g. trade tax , should be compensated by the financial equalization in order to be able to continue to guarantee the fulfillment of municipal tasks). The cities, municipalities and counties in Germany generated historic surpluses in 2017 and 2018, while cash loans shrank. Nonetheless, the economic differences between strong and weak municipalities became ever greater.

functionality

The municipal financial equalization (KFA) is based on a state law which, depending on the federal state, is called the “Financial Equalization Act” or the “Municipal Financing Act”; it is usually passed by the state together with the state budget . The KFA is developed in several steps:

  • First of all, the total amount of funds made available for the KFA is calculated (compound mass; the name results from the term “tax association”, which is established through the financial equalization between the state and municipalities). It results from the percentage of state income in the community taxes , partly also in certain state taxes or in the state financial equalization (association quota). In many federal states, this amount is initially divided into fixed partial amounts, so separate aggregate amounts are created for municipalities belonging to the district, cities and districts that are not part of the district.
  • The next step is to determine the tax amount for each municipality. It results from the tax revenue per capita. Taxes for which a tax rate applies (property and trade tax) are standardized to a fictitious, uniform tax rate (so-called reference tax rate).
  • This tax force is compared with a financial requirement per capita. In most of the territorial states (exception: Bavaria , Mecklenburg-Western Pomerania), the municipalities are divided into size classes; In the case of larger municipalities, the number of inhabitants is increased arithmetically with a factor (main approach factor) (“population refinement”). This takes into account the fact that larger municipalities have disproportionately higher infrastructure costs and also provide services for the surrounding area. The financial requirement is determined in such a way that the composite material is used in the following steps. In some federal states, special needs are added for certain municipal tasks (e.g. school transport, culture) (ancillary approaches). In the case of districts, the area is often included in the needs assessment.
  • The difference between financial strength and financial requirements can now be calculated for each municipality. In most municipalities, the financial requirement is higher than the tax power, so they are entitled to compensation. If both amounts are the same or if the financial strength is higher, the municipality does not receive any compensation (abundant municipality), but does not have to give anything in most federal states, so that there is no horizontal financial compensation between the municipalities in these states. Brandenburg and Schleswig-Holstein , on the other hand, also provide for a financial equalization allocation for the considerably efficient, abundant municipalities, which partly flow into the respective (rural) district and partly go into the composite assets for the following year.
  • This need is compensated to a certain extent (depending on the federal state between 55 and 90%; in Bavaria 50% for districts).

The amounts calculated in this way reach the municipalities as key allocations (because they are calculated according to the aforementioned key). These funds, as they come from state taxes and the financial equalization levy, as well as the municipal tax revenue, are freely usable and not earmarked.

In many federal states, part of the composite mass is branched off in advance and distributed according to other criteria. This also includes the purpose assignments, which are mostly intended for investments.

In some federal states, a small part of the composite assets is reserved for those municipalities that are in a budget emergency, e.g. B. could not balance the budget for several years in a row. These funds are allocated on request as so-called deficit allocations or (special) requirement allocations.

The types of allocation mentioned - key, purpose and requirement allocations - together form the municipal financial equalization. The different regulations in detail make a comparison between the federal states very difficult. So exist z. B. in Schleswig-Holstein special municipal key assignments that occur in addition to the usual key assignments. In addition, each state pays funds to the municipalities outside of the KFA, for example as part of funding programs.

Financial equalization law

The Financial Equalization Act regulates the equalization claims and the equalization liabilities in detail. The guidelines of the GG were specified in three judgments of the BVerfG. It initially demanded that the general provisions of the Basic Law must be laid down by means of a yardstick and a financial equalization act, with the yardstick law taking precedence. The purpose of the yardstick law is to rationalize and depoliticize financial equalization. The judgments address both the minimum requirements and the limits of the compensation system and determine how the distribution process is to be carried out in accordance with the constitution. On the one hand, the equalization system must not result in the federal government using the supplementary allocations to create above-average financial strength in underperforming countries. The solidarity between the member states in the federal state is intended to reduce the differences, but not to level them out (ban on leveling). That is why the Law of Measures speaks of the approximation of financial strength (§ 6). It remains to be seen where exactly the limit lies; an increase in the financially weak countries to 95% of the average country financial strength appeared to the BVerfG at least justifiable. On the other hand, additional "renovation contributions" to the heavily indebted city states of Berlin and Bremen were denied; However, this only with the indication that federal aid is not yet the only remaining option to be recognized and a state of emergency cannot be determined.

Decisions of the BVerfG

The minimum and maximum compensation were constitutionally established by guidelines of the BVerfG on the basis of financial reports. The decisions go into detail on both the minimum requirements and the limits of the compensation system and specifically determine how the distribution process is to be carried out in accordance with the constitution. On the one hand, the equalization system must not result in the federal government using the supplementary allocations to create above-average financial strength in underperforming countries. The solidarity between the member states in the federal state is intended to reduce the differences, but not to level them out (ban on leveling). That is why the Law of Measures speaks of the approximation of financial strength (§ 6). It remains to be seen where exactly the limit lies; an increase in the financially weak countries to 95% of the average country financial strength seemed to the BVerfG in any case justifiable. On the other hand, additional "renovation contributions" to the heavily indebted city states of Berlin and Bremen were denied; This, however, only with the indication that federal aid cannot yet be recognized as the only remaining option and that a federal state of emergency cannot be determined.

aims

The annual financial equalization is intended to ensure that the respective state level down to the municipality - taking into account its own tax revenues - is appropriately involved in the remaining tax revenues so that it can finance and thus fulfill the tasks assigned to it. The horizontal compensation has the task of correcting the results of the primary tax distribution among the federal states, insofar as they appear inadequate, also taking into account the statehood of the federal states from the federal idea of ​​the solidarity community, the allied standing for one another. The federal principle is both the basis and the limit of the duty to provide assistance. In addition, the financial equalization is the essential material basis for the fact that insolvency proceedings according to Section 12 of the Insolvency Code are inadmissible at the federal, state and local levels as well as at most institutions and corporations under public law ( insolvency inability ). This relieves their creditors of the insolvency and repair risk of their claims. This, in turn, is the basis for the municipal credit of the credit institutions .

See also

literature

  • Model / Creifelds: Citizen paperback . 32nd edition, ISBN 3406552641 .
  • Junkernheinrich (Ed.): Special needs in the federal financial equalization . Forum Public Finances, Vol. 7. Berlin 2005. ISBN 3-929342-67-7
  • Henckel: Special burdens in the federal financial equalization . Working paper no. 56, series of publications on finance / business taxation / auditing and controlling. Trier 2002. ISBN 3-925851-84-4

Web links

Individual evidence

  1. ^ Theo Keller, Finanzausgleich I , in: Handwortbuch der Sozialwissenschaften, Volume 3, 1961, p. 542
  2. ↑ BVerfGE 38, 281, 299
  3. ↑ BVerfGE 72, 330 , 384, 386 f.
  4. ↑ Bertelsmann Stiftung (Ed.): Kommunaler Finanzreport 2019 . Gütersloh 2019, doi : 10.11586 / 2019045 ( bertelsmann-stiftung.de [PDF; accessed on September 4, 2019]).
  5. ↑ BVerfGE 101, 158 , 215 from 1999
  6. ↑ BVerfGE 72, 330, 404 from 1986
  7. ↑ BVerfGE 101, 158, 221 from 1999
  8. ↑ BVerfGE 101, 158, 221
  9. ↑ BVerfGE 101, 158, 160
  10. ↑ BVerfGE 72, 330, 404 from 1986
  11. ↑ BVerfGE 101, 158, 221 from 1999
  12. ↑ BVerfGE 101, 158, 221
  13. ↑ BVerfGE 101, 158, 160
  14. ↑ BVerfGE 72, 330, 384, 386 f.