Social benefits and other payments which the city is legally or contractually obligated to are exempt from the budget freeze. For the time being, there will also be no cuts in day-care centres, emergency services, waste management, street cleaning and municipal staff. All other current (consumptive) expenditures, however, must be cut by the departments - or the treasury will have to give its approval separately. "Due to the severe budget deficit, the released funds are to be managed extremely sparingly," says the decree, which is available to the GA. "Expenditure that is not absolutely necessary is to be discontinued. A strict economic efficiency standard is to be applied." New "consumptive commitments" must cross Heidler's and Dörner's desks, as must new investments.

The treasurer is by no means expecting a better situation next year. "In principle, we can already assume that only 80 percent of the planned budget for 2024 will actually be available," she writes in the decree.

One of the reasons behind the freeze is a change in financial policy by the government of the state of North Rhine-Westphalia. With the "Law to Isolate the Burdens Resulting from the COVID 19 Pandemic and the War against Ukraine", it had made it possible for the municipalities to "isolate" the financial damages of the Coronavirus years and the Russian war of aggression - so to speak, to leave them out of their own budgets for a few years, although loans must of course still be taken out and serviced to compensate. The city of Bonn alone has isolated a whopping 302 million euros up to and including 2026, which would otherwise have massively increased its annual deficits. For example, it lists the expenses for refugees from Ukraine, higher energy prices and increased interest rates among the consequences of the crisis.

But in July, the state parliamentary parties of the CDU and the Greens surprisingly changed the rules of the game. The isolation option is now to end as early as next year. Admittedly, Bonn has an approved double budget that also includes isolation in 2024. The city assumes that the district government of Cologne will therefore apply the legal situation that applied until a few weeks ago for next year. However, this does not seem certain yet. Otherwise, there will be an additional 95-million-euro hole in next year's budget - which would push the municipality further towards an emergency budget.

Heidler's second big problem is the rise in interest rates, which are pure poison for the highly indebted city. If the municipality budgeted 42 million euros for interest this year, it would be almost 60 million in 2024, 70 million the following year and 85 million in 2027. At the same time, personnel costs are rising after the city administration, with the blessing of the council coalition of the Greens, SPD, Left and Volt, has once again created around 389 jobs. This means that 635 positions have been added since 2021. Personnel costs grew by around 50 million euros in this period to 399 million euros in the current year. In 2024, Heidler has already budgeted 419 million euros for this, whereby she has not even realistically taken into account the upcoming collective bargaining round for civil servants.

With the passing of the double budget, the council alliance has decided on an increase in trade tax and the extension of the hotel bed tax from January 2024. A similarly discussed increase in property tax B (Grundsteuer B) - to be borne by all owners and tenants in the city area - was initially rejected by the parliamentary groups. Instead, they gave Dörner and her administration the task of initiating a consolidation process - i.e. either saving or increasing revenues. "The Bonn budget shows considerable structural deficits," explains Deputy City Spokesperson Marc Hoffmann. "In this respect, there is also a need for consolidation regardless of the legal situation."

Concrete austerity measures beyond the general budget freeze have not yet leaked out. However, it is already apparent that subsidy recipients such as the providers of social institutions could run into difficulties next year. The treasurer's office has issued the following decree for all grant notifications to independent organisations: "It cannot be assumed from this approval that the funding can continue beyond 2023 to the same extent as before. The City of Bonn cannot compensate for cuts by other funding bodies. We ask you to take this funding risk into account in your planning."

The district government of Cologne, as the supervisory authority, has approved the budget without conditions, but has once again expressed clear criticism of Bonn's financial policy. In a letter to Treasurer Heidler, it says that the planning does not show "how the enormous increase in debt and the threatening acceleration of the depletion of equity capital are to be effectively and consistently countered". For years, the local authorities have been criticising the high expenditure on municipal staff and cultural institutions in Bonn.

Original text: Andreas Baumann

Translation: Jean Lennox