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Municipal financial equalization; application for needs-based allocations and stabilization aid for rural districts

Needs-based allocations are granted in the case of special expenditure and task burdens and for expert opinions on budget consolidation. Stabilization aid is granted as a special form to structurally weak districts in financial difficulties that are willing to consolidate.

Forms

  • Bedarfszuweisungen bzw. Stabilisierungshilfen

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Procedure details

Classic needs-based allocations

Needs-based allocations are granted to rural districts which, due to their specific structural circumstances (e.g. high population decline, high unemployment rate), have to bear extraordinary burdens which are not covered by the standard allocations of the municipal financial equalization system and which lead to particular budgetary difficulties for individual rural districts - in relation to the general budgetary situation of the rural districts - despite exhausting their own revenue possibilities. Counties can also receive needs-based grants for budget consolidation reports prepared by the Bavarian Municipal Audit Association (BKPV).

Stabilization aid

Stabilization aid is a special form of needs-based allocation. Districts that are particularly affected by the negative demographic development and are in financial difficulties through no fault of their own or whose financial capacity is at risk can receive state aid for self-help through the granting of stabilization aid. In this context, adherence to a stringent consolidation course, including the creation of a budget consolidation concept, is essential. The aim is to achieve a sustainable reduction in interest and repayment payments so that the districts regain more financial scope for action. The focus of the use of funds is therefore on debt repayment.

Requirements for the granting of traditional needs-based grants:

  • Special burdens on the administrative district that go beyond the usual scope and do not exist in the majority of administrative districts,
  • difficult budgetary situation (to be determined, among other things, on the basis of the free financial margins, amount of reserves, district levy rate, etc.).

Requirements for the granting of traditional needs-based grants to rural districts for BKPV reports:

  • The report must be up-to-date and
  • the district must have particular budgetary difficulties.

Prerequisites for the granting of stabilization aid:

  • Existence of financial hardship (assessment as part of an overall assessment, including free financial margins, reserves, indebtedness),
  • Existence of structural hardship (above-average loss of inhabitants or tax capacity of the municipalities belonging to the district is significantly below the state average),
  • Proof of willingness to consolidate (e.g. by drawing up or updating and implementing a budget consolidation concept).
  • From the 6th year of application additionally: existence of a special need

  • 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 to the responsible district government in the required digital form. These forward it to the Bavarian State Ministries of Finance and Home Affairs and of the Interior, Sport and Integration.

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 Home Affairs. 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 are made once a year (in autumn) on all applications for needs-based allocations and stabilization aid; 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
Editorial responsibility Bayerisches Staatsministerium der Finanzen und für Heimat
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