Budget security concept
The budget security concept (sometimes also called budget consolidation concept) is a measure provided for in the German municipal regulations since 1987 , which is intended to reorganize municipal budgets and aims to achieve full expenditure coverage within a period of up to ten years. The budget security concept represents a legally enforced budget consolidation at the municipal level. In the 1990s, all federal states adapted this instrument of municipal supervision in their municipal ordinances in different variations and levels of regulation . It can have a repressive function to restore budgetary equilibrium, but also the function of a condition for granting additional allocations.
Legal bases
The postulate of budget balance is specified in the various GemO of the federal states as a financial goal (e.g. § 75 Paragraph 2 GemO NRW; is quoted below) and otherwise also regulated in the constitution ( Art. 110 Paragraph 1 Sentence 2 GG ). However, if a municipal budget cannot be balanced, a budget security concept has been required since 1991 according to Section 76 (1) GemO NRW (similar regulations can also be found in other GemO). The first use of the crisis instruments in the Municipal Finance Act of North Rhine-Westphalia in 1987 and its background led to the final adoption of the instruments of budget security in the municipal code of North Rhine-Westphalia.
A prerequisite for a budget security concept in cameralistics is that the expenditure exceeds the income, i.e. there is a budget deficit. This deficit can only be compensated by reversing equalization reserves or borrowing. If a deficit cannot be covered by the release of an equalization reserve, the general reserve must be attacked. This requires the approval of the supervisory authority and, in the cases of § 76 GemO, the preparation of a budget security concept. Depending on the extent to which the general reserve is used, the obligation to draw up a budget security concept can also be triggered earlier. The budget security concept also requires the approval of the supervisory authority (Section 76 (2) GemO) and must determine the point in time at which budget balance can be achieved again. The budget security concept is to be resolved by the municipal council separately according to the administrative and asset budget (Section 41, Paragraph 1h GemO). The municipalities affected by the budget security concept receive so-called requirement allocations via their supervisory authority, which may only be used for a specific purpose to compensate for a budget deficit. In the case of Doppik , the ordinary income must cover the ordinary expenses. If this is not the case, a budget security concept must also be applied for here. However, approval of the budget security concept can only be granted by the municipal supervisory authority if expenditure coverage can be achieved at the latest in the tenth year after the budget year concerned. If a budget security concept cannot be approved, a municipal emergency budget must be drawn up (Section 82 GemO). If the general reserve has been used up in full for the purpose of balancing the budget, there is overindebtedness according to Section 75 (7) GemO .
The budget security concept does not intervene disproportionately in the municipal financial sovereignty as part of the constitutional guarantee of self-government ( Article 28, Paragraph 2 of the Basic Law) if the municipal supervisory authority objects to an intended reduction in municipal tax revenue and cancels it. According to the GemO, the municipalities have a budgetary obligation to do everything possible to achieve this goal as quickly as possible by reducing expenditure and increasing income. In particular, this includes the obligation to refrain from taking measures to reduce revenue. However, in this ruling the BVerwG forbade the municipal supervisory authority to prescribe to the municipality what to do in the event of an unbalanced budget without alternative. Even if the financial situation of the municipality concerned is very tense and even the fulfillment of the mandatory tasks may no longer be ensured, it is within the scope of the municipality to decide through its democratically elected bodies, such as the necessary reduction of voluntary services and the generation of additional income ( e.g. through duties and taxes). Intervention is permissible, however, if the submitted budget security concept does not reveal how loss of income can be compensated for with sufficient reliability.
The through Art. 106 Abs. 6 Satz 2 GG i. V. m. § 25 para. 1 GrStG and § 16 para. 1 GewStG granted multiplier law serves to ensure adequate funding of municipalities. On the one hand, it enables them to compensate for differences in the burden and in the productivity of the tax sources allocated. On the other hand, the municipalities should have the opportunity to adjust their income to the financial needs by increasing the trade tax and thus remain able to act in the face of growing household burdens. The municipal financial sovereignty does not consist in the fact that the municipality can switch freely at will, but in that it makes responsible arrangements and also takes into account its position within the self-government of the modern administrative state and the resulting need for financial equalization in its measures.
Economic issues
The budget security concept was originally intended as an exception, but has become a widespread phenomenon in municipalities. Every public budget is subject to the postulate of budget equilibrium. Budget balancing means that expenditure in the budget is covered by corresponding income and thus there is no budget balance. From a financial point of view, a budget surplus is equated with a balanced budget. However, budget deficits, i.e. the reduction of equity and thus the loss of municipal assets, must be avoided. This makes the budget security concept an early indicator of municipal financial crises.
Household-specific terms
In cameral budget law, the system of budget equalization is based on the terms "material and formal equalization", "organizational and structural deficit" and also answers the question of the subordination of the budget security concept. Every budget is formally balanced, namely ultimately through the release of reserves and / or borrowing. The budget is materially balanced if the income is identical to the expenditure and the income does not contain any loans taken out. It follows from the subsidiarity of borrowing that budget equalization is basically to be understood materially. The federal and state laws succinctly demand a balance of income and expenditure ( Article 110.1 GG, Article 75.3 GemO). A significant part of municipal income is generated from the so-called municipal financial equalization. A budget is materially balanced if the scheduled repayments for old loans are covered by the income. If this is not the case, there is an original deficit that becomes a structural deficit if it cannot be compensated for in the next budget year and is increased by new (original) deficits. The subordination of the budget security concept decides whether a municipality must primarily exhaust financial reserves in the form of assets, tax levies, levy increases or loans before the budgetary security concept can deviate from the budget equalization requirement.
If deficits are compensated for by borrowing - for the purpose of formal budget balancing - other budget-specific terms appear. The borrowing referred financed through loans part of a household. A distinction is made between gross new debt ( gross borrowing) and net new debt (net borrowing). The new liabilities taken on for a household in the financial year are gross new debt . The gross new debt minus the old liabilities repaid in the budget year is referred to as net new debt . If the net new debt is zero, the gross new debt was used exclusively to repay old debts. This unhealthy development suggests that at least the repayment, if not the loan interest as well, could not be covered by income. This distinction is intended to visualize whether and to what extent new borrowings are also or exclusively used to repay old loans.
The legal situation within the framework of the new municipal financial management also affects the budget security concept. In the future, budget balancing will be required for the result budget, in which ordinary income and expenses have to balance each other. However, the requirement of a budgetary security concept is no longer directly linked to the failure to achieve budget balance, but to a reduction in the general reserve that goes beyond certain criteria.
Web links
Individual evidence
- ^ Friedrich Wilhelm Held: We remember: important developments in local politics and local supervision in the past few years ". In: Ministry of the Interior of the State of North Rhine-Westphalia: Forum Local Supervision: In the field of tension between local self-government and national responsibility." Düsseldorf 2001. pp. 35-68
- ↑ René Geißler: Municipal law control approaches of budget consolidation. Municipal Science Institute of the University of Potsdam. Opinion No. 4/2009.
- ↑ the deadlines are regulated differently in the individual federal states and start at four years
- ↑ BVerwG, judgment of October 27, 2010 ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. , Az. 8 C 43.09, full text.
- ↑ BVerfG, decision of January 27, 2010 , Az. 2 BvR 2185/04 and Az. 2 BvR 2189/04, full text.
- ↑ BVerfG, decision of May 21, 1968, Az. 2 BvL 2/61, BVerfGE 23, 353 .
- ↑ Bernd Jürgen Schneider, Handbook of Local Policy North Rhine-Westphalia , 2009, p. 146
- ↑ Christian Jahnsdorf, basics of government financing through loans , 2003, p 89
