The 2025 budget plan presented by the pilgrimage town of Kevelaer shows a deficit of 5.5 million euros and further deficits are also expected for the following years, which will lead to the need to draw on liquidity loans to a considerable extent. The figure of 5.5 million euros is already the deficit that will remain after intensive cuts and an increase in property tax. "The result of intensive discussions between the treasurer and all departments in the company as to which measures will be implemented next year, for example in the area of Kevelaer marketing or building management, but also in other areas, resulted in savings of 1.5 million euros. In addition, the draft budget presented includes a further 2 million euros in revenue from the increased property tax," said Mayor Dr. Dominik Pichler during the budget presentation.
The treasurer is also forecasting deficits for the coming years: the shortfalls for 2026 are around 4.7 million euros, 2027 around 4.7 million euros and 2028 around 4.1 million euros. The equalization reserve will be completely depleted by the end of 2026.
The key allocations that the pilgrimage town of Kevelaer receives from the state will remain constant at around € 4.8 million in 2025 compared to 2024, but will be nowhere near enough to compensate for the considerable cost increases in some areas.
Possible increase in property tax
In order to absorb the rising costs and prevent the budget from becoming unstable, the pilgrimage town of Kevelaer cannot avoid raising taxes. As already mentioned, this scenario is already set out in the budget plan presented. Property tax A and B - the taxes that property owners have to pay for their developed properties (property tax B) or undeveloped properties (property tax A) - have already been increased accordingly.
The property tax is calculated by multiplying the amount measured by the tax office by the assessment rate. The new property tax reform, which comes into force on 01.01.2025, has led to the tax office redefining all property tax assessment amounts for property owners. As the new assessment amounts in Kevelaer are lower in total than the old ones, the Ministry of Finance has set revenue-neutral assessment rates, which ensure that the city continues to have the same total revenue from property tax. "Revenue-neutral" does not mean that all taxpayers pay the same amount as before. Some owners will pay more as a result of the revaluation, others less. For Kevelaer, the new revenue-neutral assessment rate for property tax A is 490% (previously 259%) and for property tax B 585% (previously 501%). Due to financial developments, however, property taxes will have to be raised significantly above these revenue-neutral assessment rates. The 2025 draft budget provides for an increase to 678% for property tax A and 810% for property tax B. Ralf Püplichuisen explains: "The increase in property tax is a possible measure. The final decision will be made by the council of the pilgrimage town of Kevelaer. I know this is strong stuff, especially in an election year, but: even elections do not override the general financial development. In my opinion, the move to increase taxes to this extent is unavoidable.
Expenditure by the city
In his presentation, the treasurer outlines the largest cost blocks of the pilgrimage town of Kevelaer:
- Personnel costs: The personnel costs of the pilgrimage town of Kevelaer will increase by 8.9%, or around € 1.6 million, less due to additional jobs than due to the high wage settlements of recent years
- Material and services: Cost increases of around € 870 thousand in the areas of implementation costs for open all-day school, energy costs, building cleaning and insurance, IT costs and student transportation
- Social and youth welfare: cost increases compared to 2023 in the areas of migration and integration (+ € 692 thousand), daycare facilities for children (+ € 722 thousand), help for young people and their families (+ € 4.66 million). The deficit in the area of economic youth welfare amounted to around € 7.3 million in 2023 and will rise to € 9.8 million in 2025.
- District levy, public transport costs and costs of support centers: cost increases of around € 2.5 million; the district levy will be raised from 27.26% to 29.86% (the district will be affected by the same cost increases as the municipalities). The district levy alone therefore increases by around € 2 million to € 14.2 million.
And, of course, the city administration is not spared from general price increases. The total amount of expenses for materials and services is around € 17 million and can only be kept at least constant because considerable cuts have already been made in maintenance measures and other services. The cuts here amount to a total of around € 850 thousand.
Revenue of the city
The treasurer emphasizes: "In principle, we do not have a revenue problem; expenditure is rising dramatically in some areas and is significantly exceeding revenue, although we are seeing an improvement in some income."
The most important revenues in the budget are taxes and similar charges, which account for around 55% of the total amount of all revenues. Total income of around 49.1 million euros is planned for taxes and similar charges. This represents an improvement compared to 2024, which is boosted in particular by positive forecasts for tax revenue and the share of income and sales tax. The largest revenue items for the pilgrimage town of Kevelaer are as follows:
- Trade tax remains the largest revenue item. A revenue of 22 million euros is expected for 2025.
- Grants and allocations amount to around € 20.7 million in 2027. In particular, this includes key allocations, which remain constant. It also includes funding for various measures (e.g. integrated urban development action plan) and the state's operating subsidies for daycare centers.
- The financial plan for 2025 includes payments for investment activities totaling around € 9.75 million, of which € 5.4 million will be loan-financed.
The treasurer refrains from raising the trade tax: "I see Kevelaer in the area of conflict between strong neighboring municipalities, an increase in trade tax and thus a deterioration in the economic conditions for Kevelaer companies could have a counterproductive effect."
Upcoming investments
Despite the deficit, projects and investments are planned for next year, some of which have already been approved by the Council in the past. The largest items in the investment disbursements are:
- The general land pool for the acquisition of buildings and land at € 1.2 million
- Completion of the Twisteden fire station with € 550 thousand
- Expansion of Hubertus elementary school for three pupils with €375k
- Expansion of bicycle parking facility at the train station (90% funding) with €469k
- PV systems at Wetten and Winnekendonk elementary school at € 405 thousand
- Modernization of changing rooms in Wetten with € 300 thousand
- New construction of refugee accommodation on Rosenbroecksweg with € 3.4 million
- Replacement procurement of depot vehicles at € 350 thousand
- Vehicles and technical equipment for fire departments at € 324 thousand
Further substantial investment sums are also planned for the financial planning years 2025 to 2027. The budget provides for further investment payments of 29.5 million euros. This does not yet take into account the significant investments in fire stations and school expansions expected in the coming years.
Borrowing of € 5.4 million is planned for 2024 and further borrowing of around € 21 million for subsequent years. The interest burden of the pilgrimage town of Kevelaer will therefore increase considerably in the coming years.
In the week following the budget presentation, parliamentary group chairmen's meetings were held with the mayor and the treasurer. In the coming weeks, the parliamentary groups will discuss the draft budget. The budget will be discussed at the meeting of the main and finance committee on Tuesday, December 3, 2024. Until then, the parliamentary groups can submit motions to amend the draft budget. The budget will then be finally adopted by the Kevelaer Pilgrimage City Council on December 19, 2024.