The 2023 financial year
As the city administration has informed politicians, around 70.8 million euros higher tax revenue is expected in 2023, which is fully attributable to trade tax. The planned municipal deficit of around 42 million euros for 2023 could probably be covered by the additional revenue. However, the city has isolated more than 93 million euros as war-related expenses for the current year, which are therefore not included in the deficit.
The financial years from 2024
A further 50 million euros in additional tax revenue in 2024 will be reduced by the fact that income tax will perform significantly worse and the city will no longer be allowed to isolate war-related tax shortfalls in the annual financial statements, meaning that ultimately around 14 million euros in additional revenue is likely to remain in 2024. Higher tax revenues are also expected for the following years, ranging between EUR 21 million and EUR 45 million in the years 2025 - 2027.
Lower key allocations
However, this analysis does not take into account effects resulting from the financial equalization of the state. Higher tax revenues mean lower key allocations if the increase in tax revenues in the city of Bonn is higher than in the other municipalities in NRW. This circumstance is always reflected with a time lag. Ultimately, only 20 percent of the additional trade tax revenue remains in the municipal budget over the years.
Municipal Financing Act
The figures from the Municipal Financing Act (GFG), which have now been communicated by the state, do not include the tax increases. These will only be taken into account in the financial equalization for 2025 - as reduced allocations. Irrespective of this, total allocations of 262 million euros were previously planned for 2024, but according to the state's current model calculation, these will now only amount to 252 million euros - 10 million euros less than expected. Current developments, such as the reduction in the landscape levy and further allocations for family benefit equalization, will reduce the loss to around 3.5 million euros.
It must also be taken into account that the additional income is devalued by inflation/price increases. The city is currently preparing the quarterly forecast after the third quarter, so that more precise statements can then be made on the development of the deficit.
Irrespective of the adjusted forecast for tax development, the city administration will continue on its chosen path of a comprehensive consolidation process.