Löhnberg on the brink: financial crisis surprises citizens and the federal government!

Löhnberg on the brink: financial crisis surprises citizens and the federal government!

The small community of Löhnberg, once known as the fastest growing rural community in Hesse, is heading towards a financial crisis that affects the entire community. Loud hessenschau.de The State Audit Office is examining the municipality's finances after it has received evidence of serious financial problems since 2019. Despite these warnings, the Giessen Regional Council (RP) remained inactive and the condition in Löhnberg continued to deteriorate. The President of the State Audit Office, Walter Wallmann, states that the situation in Löhnberg is unique in Hesse and criticizes the inadequate reactions of the supervisory authorities.

Löhnberg is struggling with a variety of problems: missing annual financial statements, oppressive debt and acute liquidity bottlenecks. The current figures make citizens worried. In May 2023 it became known that the community was partially insolvent. Löhnberg has to repay an emergency loan of 4 million euros by the end of 2027, while the result budget was recently only 12 million euros. The residents are surprised that they were not informed about the precarious financial situation sooner and are wondering how this misery could have come about after the community has attracted primarily families in recent years and has been able to significantly renovate its infrastructure rnd.de.

The reaction from the community

Reactions to the financial difficulties are divided. The new mayor Reiner Greve was surprised by the Court of Auditors' assessment and reported further financial ambiguities. He plans to bring in outside experts to sort out the church's finances. Against the background of this critical situation, the local council will meet on October 31, 2023 to decide on an austerity course that could include, among other things, the introduction of daycare fees and the doubling of property tax. These measures entail additional costs for many families, which can range from 400 to 500 euros per month.

The financial crisis leads to tensions within the community. While some citizens wonder how it could have come to this, others criticize the failures of the old administration, under former mayor Frank Schmidt, who retired after months of illness and is currently not available for media inquiries. Under his leadership, the budget remained balanced from 2014 to 2021, but financial statements have not been presented since 2017, contributing to the current situation.

A nationwide problem

Löhnberg's financial difficulties are not unique; many municipalities across the country are struggling with similar challenges. According to a report on tagesschau.de Many districts have bottlenecks and are confronted with a dramatic financial situation. The federal government is called upon to find solutions and support municipalities, not least due to the ongoing effects of Corona, migration and the energy crisis. The debate about the financial resources of municipalities is becoming ever louder, and it is feared that villages like Löhnberg will have to face an even darker future without timely help.

The development in Löhnberg is further proof that it is time to rethink municipal finances and, in particular, to improve cooperation between the municipalities and the higher-level administration.