Budget 2024 adopted

Unanimous decision

Last Monday, the city council unanimously approved the Hof budget as well as the business plans for the building yard, the Freiheitshalle and Volksfestplatz and the crematorium for 2024. Every year since 2016, the city of Hof has managed to draw up a budget that has been approved by the government subject to conditions. This means that the city's most costly projects (excluding funding measures), such as the general renovation of the technical secondary school (€3.5 million), the rainwater overflow basin at the district administration office (around €3.3 million) and the rainwater overflow basin on Peuntweg (around €2.1 million) can be tackled.

Temporary increase in trade tax

Another item on the agenda of the city council meeting was the increase in trade tax. It was decided with 14 votes against to increase the assessment rate from 400% to 415%. This means that the city of Hof will achieve the minimum transfer from the administrative budget to the capital budget. The minimum transfer is the sum of the ordinary repayment of existing loans. There was a gap of 1,279,020 euros in revenue for this purpose.

Mayor Eva Döhla: "With the additional income of around 1.2 million euros, all the conditions are now in place for the government of Upper Franconia to approve the Hof budget. This will probably also make it possible for the city to receive stabilization aid from the Ministry of Finance in Munich again in 2024. This would have a positive impact on Hof's schools and infrastructure in the form of bridges and roads, so that both the people of Hof and its businesses can benefit."

The statutes for setting the rates of assessment for real taxes have thus been adopted by the city council. As city treasurer Peter Fischer explained in his explanations, the city of Hof has the lowest level of debt since 1992. The total debt level in 2024 of around 80 million euros is not expected to increase significantly in the next three years.

City Treasurer Peter Fischer: "After intensive internal discussions, the arguments in favor of raising the trade tax prevailed. It is the profit of a commercial business that is taxed, so the argument that it is an unreasonable burden on businesses does not apply. This means that companies in our city will participate in the maintenance of the infrastructure in the same way as private individuals."

Natural persons and partnerships can offset this increase against tax, which means that there will be no additional burden for them overall. Freelancers are also not affected, as they do not pay trade tax. Only corporations are affected by the increase in the assessment rate, Fischer continued.

Planning security for companies

The fee increases decided so far in the budget consolidation in 2024 also primarily affect individuals, e.g. the increase in parking fees after a long period of stable prices. With the increase in the trade tax rate, it is not the turnover but the profit of a commercial business that is taxed. Under no circumstances does this create the risk of short-term insolvency.

Limiting the period to three years gives companies planning security. On the one hand, established companies can rely on the fact that things will become more favorable for them again after the three years. On the other hand, this will not deter new companies from setting up in the area.

In talks with Lord Mayor Eva Döhla and City Treasurer Peter Fischer in Munich on 19 December 2023, representatives of the Bavarian State Ministry of Finance and Home Affairs emphasized that the City of Hof must make its willingness to consolidate clear in the long term. This was reaffirmed in writing from Munich. In addition to expenditure savings, this letter also referred to the possibility of increasing the assessment rates for property and trade tax and thus the city's revenue.