The chairman of the Association of Taxpayers in Hesse, Joachim Papendick, says: “It cannot go on like this in the long run.” Politicians must address the issue in the next legislative period at the latest, he demands and points out that the state government has created more than 13,000 new jobs since 2015 and the pension burden in Hesse has continued to rise. The chairman also warns of tax increases that would be “poison” for economic development. Although Hesse's tax revenue fell in 2020 due to the corona pandemic, it was still higher than in 2018, the fifty-five-year-old clarified in an interview.
The state of Hesse recorded a total result of minus 6.3 billion euros last year.
This figure, which Finance Minister Michael Boddenberg (CDU) reports in the state's 13th annual report, not only includes the data of the core budget, but also state companies, participations and special assets.
The annual report is a so-called consolidated annual financial statement and, according to Boddenberg, represents a "comprehensive inventory of the state finances". While the borrowing for the core budget was only around EUR 200 million, almost EUR 1.5 billion lower than originally forecast, the state's credit market debts rose overall by almost 4.1 billion to around 45.8 billion euros.
"Hesse old age savings book"
Fixed assets, however, only increased by around 800 million euros to around 29.9 billion euros. The gap in civil servants' pensions is even more drastic. According to Boddenberg, the so-called “Hesse old age savings book” was increased by around 368 million euros to 4.1 billion euros. However, provisions for pensions and benefits rose by around three billion euros to almost 96 billion euros.
“There is a fundamental problem. That is the very high share of personnel costs in the household, which goes in the direction of 40 percent, "comments Papendick on the figures and warns:" If you do not make provisions for future years, the shortfall will grow year after year. "In his estimation, this is also the development Result of the country's personnel policy. “In 2015 the country had 158,763 employees and last year more than 172,000. That is an increase of more than 13,000 jobs in five years. "
According to the annual report, the number of employees rose by around 3,600 between 2019 and 2020 alone. According to Papendick, however, for decades the country has made little and no provision at all to be able to pay civil servants' pensions in the future. He therefore calls for the provision to be increased. “Otherwise future generations will have to bear that,” explains Papendick. Due to the high proportion of personnel costs, a consolidation of the state budget is only possible if you turn the adjusting screw for personnel. In the first black-green coalition agreement, the reduction of 1,800 jobs was agreed. However, due to the unexpectedly high tax revenues in recent years, the new positions mentioned have been created since 2015.
"In the second black-green coalition agreement, there were no more proposals for budget consolidation at all, because it was assumed that this would continue with the development of tax revenues," said the chairman.
The corona pandemic, however, thwarted politics.
“When the state government talks about tax shortfalls, you have to look very carefully.
Hessen originally planned tax revenue of 23.1 billion euros for 2020.
In the end it was 21.3 billion euros.
The state government says that is a minus of 1.8 billion, ”explains Papendick.
State of Hesse is deep in the chalk
“If you compare that not with the budget, but with the tax receipts from previous years, then it looks a little different. The 21.3 billion euros in 2020 were even slightly higher than the 2018 tax revenue of 21.2 billion euros. ”His conclusion:“ The discussion creates a more dramatic impression than is appropriate based on the bare figures. ”
In sum, the country is deep in the chalk. If you compare assets with liabilities and pension commitments, the annual report shows a deficit of around 126.5 billion euros that is not covered by equity. "Especially in a federal state with high personnel costs, it is unrealistic to be able to reduce this shortfall," says Papendick. He accuses the state government of failing to reduce credit market debt, which accounts for around a third of the total deficit, in the years of high tax revenues. “A public budget cannot be balanced during a pandemic, but expenditure was increased significantly even before the corona pandemic,” he is convinced.
The chairman of the Hessian taxpayers demands that politicians save more on personnel in the future. But he does not have much hope: "I am not very optimistic that budget consolidation will be tackled in this legislative period." that were planned before the corona pandemic - regardless of economic development.