Rhineland-Palatinate: Municipalities demand relief instead of fusion debate!

Rhineland-Palatinate: Municipalities demand relief instead of fusion debate!

In the debate about the financial future of the municipalities in Rhineland-Palatinate, a possible municipal reform focuses on. The municipality of Rengsdorf-Waldbreitbach, which was created on January 1, 2018 from the voluntary association of the municipalities of Rengsdorf and Waldbreitbach, is an example of the challenges that many municipalities are facing. According to the Rhein-Zeitung Affect numerous municipalities under considerable financial burden.

In this context, the municipal and urban association of Rhineland-Palatinate has given a clear rejection of the ongoing merger debates and instead demands real relief. Court of Auditors Marcel Hürter and the FDP parliamentary group leader Philipp Fernis, however, initiated the discussion about possible advantages of larger allies that could create relief by division.

Financial relief from the PEK-RP

The PEK-RP program, which focuses on strengthening Rhineland-Palatinate municipalities, was designed as a long-term relief measure. A historical debt of 3 billion euros is a central element. This model combines the new municipal financial equalization (KFA) and the municipal investment program climate protection and innovation (KIPKI) and is particularly aimed at municipalities with high liquidity loans that often endanger the financial ability to act.

As of December 31, 2020, the liquidity loans from the Rhineland-Palatinate municipalities were around 7.1 billion euros. After the debt relief volume, which works on December 31, 2020, municipalities can benefit from a debt relief volume of almost 3 billion euros. More than half of these relevant liquidity loans could be eliminated, which the municipalities relieved financially. This debt relief is essentially carried out by the country, which takes over the risk of interest rate for the relieved debts.

implementation and requirements for the municipalities

The administrative regulation of the program came into force in October 2023 after the execution law was decided with a majority in the state parliament. The debt relief measures will be implemented in 2024, with 2.7 billion euros being made available for the full contract. However, the municipalities are obliged to control their remaining liquidity loans themselves and to repay within 30 years.

In addition, the municipalities must have the fees for the change of debtors. The functioning budget system also requires changes in the right of municipal budget to prevent the liquidity loan stocks from increasing again. Overall, the debt of the debt with the amount of 500 million euros for the double budget 2023/2024 and around 100 million euros annually in the years 2025/2026 and beyond.

The current reforms and programs show that there is a clear will to financial relief for the municipalities in Rhineland-Palatinate. However, the challenges of a small -scale municipal structure make it necessary for the affected areas to work together.