Kaiserslautern's 2024 Budget: Surplus, Debt Reduction, and Challenges

Budget Development and Performance Statement 2024

In 2024, the city of Kaiserslautern closed its budget with a yearly surplus of 3.1 million euros, significantly exceeding the planned result. The budget balance was achieved in the performance statement as well as in the balance sheet and financial statement. The surplus was primarily generated through cost-saving measures and higher revenues, especially from taxes and service charges.

Compared to the previous year, however, the result is clearly worse. While a record surplus of 61.52 million euros was recorded in 2023, it dropped to 3.15 million euros in 2024. Reasons for the decline include higher personnel and social security costs as well as investment expenditures that were not fully covered by revenues.

The performance statement shows that recurring revenues exceeded the plan by 3 million euros, while expenses remained 12.9 million euros below the plan. In the financial statement, a surplus of financial resources of 23.6 million euros was achieved, representing a significant improvement compared to the planned financial deficit of 24.6 million euros.

Investments and Loans

The city placed a stronger focus on investments in 2024, with loan intake decreasing. Approved investment loans amounted to 37,005,640 euros, but only 34 million euros were actually taken up. Liquidity loans had a maximum approved amount of 730 million euros, with only 600 million euros actually approved.

One of the largest investments was the capital contribution to Westpfalz-Klinikum GmbH of 4.56 million euros. In addition, significant projects such as the city redevelopment KL-West/Pfaff with 3.41 million euros and investments in school digitization with 3.19 million euros were carried out.

Within the "PEK-RP" program, the state of Rhineland-Palatinate took over 369,334,253 euros in debt, with 364,036,375 euros for liquidity loans and 5,297,878 euros for remaining debts to be paid off in 2025. The city has committed to repaying the remaining 159.7 million euros by 2053.

Balance Sheet Development and Equity

The city's balance sheet development is positive. Equity rose by 146.8 million euros to 517.8 million euros, attributed to debt reduction and investments. At the same time, liabilities fell by 214.8 million euros to 409.8 million euros. The value of tangible fixed assets was 909,099,282 euros, while financial assets increased significantly to 287,940,854.37 euros.

The per capita debt decreased from 7,460 euros (2023) to 4,080 euros (2024), which is attributable to the success of the PEK-RP program. The asset intensity and equity ratio also improved, underlining the city's financial stability.

Accounting and Audit Results

The city's accounting in 2024 showed some deficiencies identified by the audit committee. Missing documents, unclear document texts, and multiple edits were noted. The financial software Axians Infoma GmbH, used by the city, is not certified, and there is no approval process for interfaces. In addition, a difference of 11.09 euros between the main and auxiliary accounting was found, although it was properly documented.

As a recommendation, a training concept for financial software users, a target process for accounts receivable management, and a data minimization concept were proposed. In addition, a rolling inventory procedure was recommended to improve the transparency and accuracy of accounting.

Budget Balance and Municipal Supervision

The 2024 budget violated the requirement of budget balance, as noted by municipal supervision. Although a budget balance was achieved in the performance statement, balance sheet, and financial statement, the maintenance of the budget balance in subsequent years is assessed as hardly achievable. This shows that the city still needs to rely on cost-saving measures to remain financially stable in the long term.

Grants and Financial Assistance

The city received grants for value preservation in 2024 to various subsidiaries. The Fritz-Walter Stadium received 1.8 million euros, the Zoo Society 900,000 euros, the PEG 546,331.61 euros, and KL.digital 125,000 euros. The latter amount was initially considered illegal but became effective through non-appeal.

In addition, the city received financial assistance from the state, especially within the PEK-RP program, which enabled significant debt relief. These funds significantly contributed to debt reduction and strengthened the city's financial foundation.

Outlook and Challenges

The financial situation in Kaiserslautern remains tense, even though the 2024 budget shows a surplus. Debt must continue to be reduced, and investments must be balanced with revenues. In addition, accounting must be improved to ensure transparency and trust.

Another problem is the downward spiral in municipal finances in Rhineland-Palatinate, which also affects Kaiserslautern. The city is among those with the highest liquidity loans, indicating long-term challenges.

Nevertheless, the new municipal financial equalization system from 2025 offers opportunities, as Kaiserslautern will continue to receive substantial funds from the special fund due to its population size and financial weakness. This could enable the city to advance investments in education, climate, and infrastructure.

Conclusion

The 2024 budget of Kaiserslautern shows that it is possible to achieve a budget balance despite financial burdens. The surplus, debt reduction, and investments in important projects are successes that the city should continue to build on. At the same time, the long-term financial planning remains crucial. Only through stable budget planning, cost-saving measures, and investments in the future can Kaiserslautern ensure its financial stability in the long term.