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Municipal financial equalization; application for needs-based allocations and stabilization aid for cities and municipalities

Needs-based allocations are granted, among other things, in the event of unjustifiable events, for budget consolidation reports and municipal mergers. Stabilization aid is granted to structurally weak municipalities in financial difficulties that are willing to consolidate.

Forms

  • Bedarfszuweisungen bzw. Stabilisierungshilfen

Responsible for you

Landratsamt Neustadt a.d.Aisch-Bad Windsheim

Street address

Konrad-Adenauer-Straße 1
91413 Neustadt a.d.Aisch

Postal address

Postfach 1520

91405 Neustadt a.d.Aisch

Mehr zur Behörde

Regierung von Mittelfranken

Street address

Promenade 27
91522 Ansbach

Postal address

Postfach 6 06

91511 Ansbach

Phone

+49 981 53-0

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Procedure details

Classic needs-based grants

Cities and municipalities can receive needs-based grants in the following cases, among others:

  • Loss of trade tax,
  • hardships within the framework of key allocations,
  • Voluntary municipal mergers,
  • Establishment of an administrative community or accession of a municipality to an existing administrative community,
  • repair of damage caused by natural disasters,
  • remediation of contaminated sites
  • rock remediation,
  • purchase of land as a result of military conversion,
  • Costs for the preparation of an expert opinion on budget consolidation (prepared by the Bavarian Municipal Audit Association (BKPV) or state audit office).

Stabilization aid

Municipalities that are considered structurally weak based on objective indicators or are particularly affected by the negative demographic development and are in a financial imbalance through no fault of their own or whose financial capacity is at risk can receive state aid to help themselves by granting stabilization aid. Since 2019, stabilization aid for cities and municipalities has been designed as a two-pillar model: Stabilization aid can be applied for to pay off old debt (1st pillar) and/or as investment aid (2nd pillar).

The aim is that through their own consolidation and the granting of stabilization aid

  • the above-average level of debt is reduced and
  • interest and repayment payments are reduced so that the municipalities regain more financial leeway.

In addition, municipalities willing to consolidate can be supported in financing necessary investments in basic municipal equipment by granting investment aid; an investment backlog can thus be avoided or reduced.

Prerequisites for the granting of traditional needs-based grants:

  • The municipality has suffered financial hardship as a result of an event or special expenditure (loss of trade tax, hardship in the context of key allocations, voluntary mergers of municipalities, establishment of an administrative community or accession of a municipality to an existing administrative community, remediation of damage caused by natural disasters, remediation of contaminated sites, rock remediation, purchase of land as a result of military conversion).
  • The municipality has exhausted all revenue options in order to absorb the financial burden caused by the special expenditure or the special event (including at least average assessment rates for property tax and trade tax, charging fees that cover costs).
  • The municipality was unable to balance the administrative budget or the municipality is experiencing financial hardship in the context of an overall assessment (including comparison of the free financial margin with the costs to be incurred, existing reserves).

Requirements for the granting of traditional needs-based grants for expert opinions on budget consolidation:

  • The expert opinion must be up-to-date and has been prepared by the BKPV or the responsible state audit office.
  • The municipality must demonstrate that it is financially weak.

Requirements for the granting of stabilization aid (Pillar 1):

  • Existence of financial hardship (assessment as part of an overall assessment based on specific criteria)
  • Existence of structural hardship (e.g. high population loss)
  • Proof of a stringent and sustainable will to consolidate (e.g. by creating or updating and implementing a budget consolidation concept based on the specified 10-point catalog)
  • From the 6th year of application additionally: existence of a special need

Requirements for the granting of stabilization aid (Pillar 2):

  • Receipt of stabilization aid three times
  • Existence and continuation of the stringent and sustainable will to consolidate, including updating and implementation of the budget consolidation concept based on the specified 10-point catalog
  • Limitation of borrowing
  • Presentation of the investment program

  • Model 2 to Art. 44 BayHO
  • Sample of § 4 No. 4 KommHV-Cameralistics or Sample § 1 Para. 2 No. 4 KommHV-Doppik
  • last profit and loss account and financial account
    (only for local authorities using double-entry bookkeeping)
  • List of voluntary services
  • Budget consolidation concept in accordance with the requirements of the Bavarian State Ministry of Finance and Home Affairs
    (only for applications for stabilisation aid)

The application for a needs-based allocation and/or stabilization aid must be submitted in the required digital form to the responsible district office for municipalities and cities belonging to the district. These forward it via the district government to the Bavarian State Ministries of Finance and Home Affairs and of the Interior, Sport and Integration. In the case of independent cities, the application must be submitted directly to the responsible district government in the required digital form. These forward it to the two state ministries.

These state ministries will review the submitted applications.

The Bavarian State Ministries of Finance and Home Affairs and of the Interior, Sport and Integration decide once a year (in autumn) on all applications for a needs-based allocation and/or stabilization aid in accordance with Art. 11 of the Bavarian Financial Equalization Act (BayFAG) in the so-called distribution committee after consulting the municipal umbrella organizations.

After the distribution committee, the district governments make the decisions; the grants are usually paid out in the same year.

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Applications for needs-based allocations or stabilization aid must be submitted by the deadline set by the Bavarian State Ministry of Finance and Regional Identity. The deadline is announced to the district governments and district administrations in the spring by letter from the Ministry of Finance or on the website of the Bavarian State Ministry of Finance and Home Affairs (see "Further links").

Decisions on all applications for needs-based allocations and stabilization aid are made once a year (in the autumn); the processing time varies depending on when the application is submitted.

Needs-based grants do not constitute funding - they are granted to mitigate financial hardship resulting from special expenses/events.

Needs-based grants are strictly subsidiary and are therefore only considered if other refinancing options (e.g. state subsidies, insurance reimbursements, compensation claims, third-party cost sharing, etc.) are ruled out.

Administrative court action

Status: 15.07.2024
Editorially responsible for prodecure description: Bayerisches Staatsministerium der Finanzen und für Heimat
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