Hesse in the financial crisis: Seven billion euros shortfall alarmed!

Hesse in the financial crisis: Seven billion euros shortfall alarmed!

The financial situation in Hesse is anything but rosy. Finance Minister Alexander Lorz (CDU) presented a deficit of a whopping seven billion euros in his report for 2024. This worrying balance is caused by stagnating tax revenues and ever-increasing personnel costs. How fr.de reported that tax revenue was reduced to 27 billion euros, which means a decrease of one billion compared to the previous year. Minister Lorz describes this development as alarming.

In the coming years, the situation will not get much better if you dare to look into the future. For 2025, financial experts are predicting only a slight increase in tax revenue to 27.5 billion euros. “The country’s financial scope is becoming narrower,” explains Lorz, emphasizing that targeted financial consolidation is unavoidable. It is important to work more efficiently with the existing staff and to digitalize processes in order to turn things around.

Need for consolidation and human resources management

The constantly rising personnel costs, which climbed to 16.8 billion euros last year, are particularly worrying. By 2025 they could even be over 24.5 billion euros. In view of almost 180,000 employees, including new positions in the education sector, police and judiciary, Lorz sees no scope for further staff growth unless the number of students increases significantly. The ongoing discussion about personnel and their financing is also causing dissatisfaction in the opposition.

FDP MP Marion Schardt-Sauer criticizes the state government's political priorities and the AfD even describes the current balance sheet as the “worst of all time”. This puts enormous pressure on the state government - the question arises as to what happens next. Although Lorz emphasizes the need for investments in education and internal security, the challenge cannot be overcome without a clear strategy.

Outlook and strategic decisions

A ray of hope could be the planned new debt of 670 million euros, which is within the scope of the debt brake. Hesse also has to hand over 3.6 billion euros to poorer federal states, which further exacerbates the already tense financial situation. world.de highlights that the state's own annual report for 2024 should provide an overview of the financial situation, but whether this is sufficient remains questionable.

With a redesigned state budget for 2025, which includes investments in education, internal security and social cohesion, and the Hessengeld, which is to be continued, there are at least signs of a better financial future. However, the options are limited and Hesse is faced with the challenge of reconciling the necessary savings and investments. hessen.de points out that salary increases for civil servants will also be postponed to December 2025 in order to save 180 million euros.

Overall, financial policy in Hesse remains a hot topic. The coming decisions will be crucial for the country's development and the satisfaction of its citizens. The question remains: Can Hesse turn things around with smart consolidation and targeted investments?