Hesse authorities to scrutinize fresh financial obligations in the year ahead (colored in black and red) - Hesse's Black-Red coalition is assessing fresh debt obligations for the year
The German states, including Hesse, have received a reprieve from the debt brake rules, allowing them to borrow up to 0.35 percent of the gross domestic product together with the federal government. This decision, passed by the Bundestag and Bundesrat in March, paves the way for a separate supplementary budget and special sessions of the state parliament.
Negotiations in Berlin on the implementation of these new regulations are expected to be completed in the second half of October. The Finance Minister of Hesse, Alexander Lorz, plans to submit the 2026 draft budget to the Wiesbaden state parliament in November.
Meanwhile, the Ministry of Finance in Wiesbaden is actively working on the 2026 budget, engaging in intensive talks with municipalities regarding the Future Pact. The weak economy and falling tax revenues have necessitated Hesse's need to take on additional debt this year.
The proposed distribution of the approximately 7.5 billion euros from the debt-financed German infrastructure special assets expected for Hesse is still under discussion. SPD Economics Minister Kaweh Mansoori has suggested that 77% of these special assets should be allocated to highly indebted municipalities for infrastructure projects such as roads, kindergartens, and schools. However, no such high municipal share has been indicated from the CDU in Hesse so far.
Mathias Wagner, the chairman of the Green opposition in the state parliament, has expressed support for Hesse's plans to use the easing of the debt brake, but with the condition that the money is spent sensibly.
The results of the autumn tax forecast at the end of October will provide important insights for budget planning in Hesse. These developments have been reported by the Frankfurter Rundschau and the German Press Agency.
As the negotiations on the distribution of these funds continue, it remains to be seen how Hesse will allocate these resources to address its infrastructure needs while ensuring fiscal responsibility.
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