City Council decides to introduce the two-year budget plan
The City Council today decided to introduce a two-year budget for the City of Chemnitz from 2017/2018.
A two-year budget offers the opportunity to relieve the administration and city council of extensive tasks for the second planning year. The early planning certainty and the elimination of provisional budget management mean that measures can be accelerated, particularly in the construction sector.
A two-year budget should be linked to the Free State's biennial budget in terms of timing due to the close link between municipal budget planning and the Free State's requirements and allocations. The Free State's next biennial budget runs from 2017/2018.
Consideration
In the event of a positive budget situation with a balanced result (at least according to the cameralised comparative calculation), the biennial budget can help to accelerate planned measures and relieve the burden on the administration and city council. This means, for example, that construction measures can be accelerated, especially during the budget-free period. In addition, there is no provisional budget management and planning security in the second year. Ultimately, the process of voting on the budget only takes place once every two years in the administration, as does the resolution by the city council and the coordination with the state directorate for approval.
In the event of a budget deficit, a two-year budget could have a negative impact due to the additional financial planning year, the more difficult forecasts as the budget planning period increases and the resulting requirements of the LDS. In the event of additional financial requirements, a supplementary budget may be necessary, particularly in the second year.
To summarise: A two-year budget offers the opportunity to relieve the administration and city council of extensive tasks for the second planning year. Early planning certainty and the elimination of provisional budget management mean that measures can be accelerated (particularly in the construction sector).
In other large cities, such as Frankfurt/Main, Mannheim, Karlsruhe and Essen, two-year budgets are already being used with good success. The city of Dresden has also been working with a two-year budget for many years. The city of Leipzig has drawn up a two-year budget for the first time for 2015/2016.