For the first time in its history, the city of Karlsruhe has had to impose a budget freeze. The reason for this is falling tax revenue as a result of the weakening economy. The already expected budget deficit of 44.8 million euros will increase by a further 50.1 million euros according to the latest tax estimate. To counteract this, municipal holdings are to cover their losses from their own reserves, while the city administration has to save 15 million euros. Specific savings measures are to be presented by the end of March.
Despite these restrictions, Head of Finance Gabriele Luczak-Schwarz emphasizes that investments are not affected. The financial imbalance results, among other things, from high deficits in the hospital and mobility sectors.
Criticism comes from Friedemann Kalmbach (voter group FÜR Karlsruhe): “The crisis was foreseeable. Warnings have been made for years, but action was taken too little too late. Now we have no choice but to react with austerity measures, which should have come much earlier. The real cost-cutting round is not due until the next double budget. Many tough savings will have to be made there. This could have been prevented if the city administration had taken countermeasures years ago. “
The budget freeze will apply for the time being until the next tax estimate in May. A decision will then be made as to whether it can be lifted.
