Celle, a city in Lower Saxony, is facing significant financial difficulties as it approaches the 2025 budget year.
Jörg Rodenwaldt, a member of the Zukunft Celle party, has expressed concerns about the city's fiscal outlook. He points out that the budget for 2025, which shows a positive result of approximately two million euros, is largely due to a one-off financial maneuver involving the transfer of assets from the Congress Union to the city's core budget. Without this transfer, the city would have a deficit of €13.1 million.
The administration attributes this downturn to rising expenditures, including the impacts of the COVID-19 pandemic, inflation, and the ongoing war in Ukraine. However, Rodenwaldt argues that this narrative only partially captures the reality. He highlights that the planned new debt for 2025 exceeds €50 million, with over 20% of this amount linked to the aforementioned transfer of assets. This financial strategy is expected to result in over €11 million in one-off taxes and ongoing annual costs due to lost tax refunds and loan interest, further complicating the city's financial situation.
In recent years, the Celle city administration has transferred various responsibilities to streamline operations. However, the budget for 2025 indicates an increase in core administrative positions, raising questions about the effectiveness of the administration's restructuring efforts. This expansion, combined with the substantial new debt, poses a threat to the target agreement between the state of Lower Saxony and the city. This agreement aimed to achieve sustainable budget consolidation and maintain a balanced budget from 2021 onward. The current trajectory raises concerns about the city's ability to meet these commitments.
Rodenwaldt emphasizes the importance of financially viable investments in infrastructure. He finds it alarming that the administration claims it will struggle to reduce its growing debt burden in the long term. Future investments are projected to be financed entirely through additional debt, which could worsen the city's financial situation.
Projections indicate that Celle's total debt could exceed €400 million in the coming years, nearly double the amount from a decade ago. Rodenwaldt questions how the city plans to manage this escalating debt, particularly considering the potential annual payments of €16 million to service the debt. He criticizes the current administration for what he sees as a reckless approach to fiscal management, where millions are spent without delivering tangible benefits to the residents of Celle. He warns that relying on accounting tricks to create an illusion of sound financial management will have long-lasting consequences for the city's economic stability.
The implications of Celle's financial challenges are significant for its residents and future development. The current trajectory suggests a potential crisis that could impact public services and infrastructure, raising urgent questions about the sustainability of the city's financial practices. The administration's ability to address these challenges will be crucial in determining the city's economic future and the well-being of its citizens.