What does a city need money for?
As a public corporation, every city is obliged by law to fulfill certain tasks (mandatory and directive tasks). In addition, it performs a wide range of voluntary tasks in the public interest and for its citizens. The list of tasks is long.
The city
- operates schools and daycare centers,
- maintains sports and event halls, the municipal library and music school, museums, youth facilities, green spaces, playgrounds, markets and cemeteries,
- builds roads, bridges and underpasses and plans construction areas,
- is responsible for street cleaning, winter services and tree control,
- finances the fire department,
- is the point of contact for all citizens' concerns,
- promotes local tourism and the local economy,
- and organizes cultural events.
These tasks for the citizens and guests of the city cost money. In addition to the wages and salaries of municipal employees who carry out the work and projects, numerous other expenses are also incurred. For example, for the maintenance or management of the city's administrative and residential buildings.
Where does the money come from?
Almost half of a municipality's revenue generally comes from taxes. Tax revenue includes its own taxes - primarily property tax and trade tax - and a share of various other taxes, such as income tax and sales tax.
The second important source of income is the financial allocations from the state of Baden-Württemberg. These include the so-called key allocations. The rest of the income comes from fees and the like. Loans occasionally have to be taken out for larger projects.
The municipal budget or: What happens to the money?
Every local authority is legally obliged to plan and manage its budget in such a way that the continuous fulfillment of tasks is guaranteed and the overall economic balance is maintained. Economy and efficiency are the top priority.
The budget shows all municipal areas of responsibility with the respective income and expenditure. Where the money comes from and what it is spent on is determined once a year in the municipal budget statutes with the budget plan. The municipal council discusses the budget in a public meeting and decides what the city will spend money on in the coming year.
The same principle applies for a municipality as for private individuals: no more money may be spent than is received. Borrowing should be avoided wherever possible.
While the income budget shows all income and expenses of the municipality and thus represents the actual consumption and generation of resources, the financial budget shows the planned cash flows and disbursements, particularly from investment activities.
How is the budget adopted?
At the end of the previous year, the administration prepares a draft budget for the coming calendar year. This includes the funding applications from all areas of the administration for planned projects and current expenditure.
This draft is submitted to the municipal council for discussion. The draft budget is usually discussed in public at several meetings, amended if necessary and finally adopted. A budget only becomes legally valid once it has been checked and approved by the regional council as the supervisory authority. The administration is bound by this plan.
What's the deal with own-account companies?
The city has established corresponding commercial enterprises to perform certain tasks. They belong to the city, but operate independently.
The municipal enterprises are managed by operations managers. The basic and most important decisions are made by the municipal council. This includes, for example, the public baths, utilities and transport company. Among other things, it is responsible for the swimming pools. The business plans of the municipal companies are part of the municipal budget. Stadtwerke GmbH is one of the municipal companies. The investment report shows which companies the city is involved in and to what extent. It is published annually.