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Gütersloh, 18/03/2010

NRW forum on local-level public finance: Ideas for reducing debt

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Empty coffers, increasing debt -- financially, many cities and towns in the state of North Rhine-Westphalia are on the brink of insolvency. At the 2010 NRW Forum on Public Finance, an event organized by the Bertelsmann Stiftung and trade-union organization DGB NRW and held on March 18 in Düsseldorf, more than 200 local business leaders, academics and policymakers discussed ways of reducing current debt levels. In a jointly written paper, Kirsten Witte, director of the LebensWerte Kommune program at the Bertelsmann Stiftung, and DGB NRW Chairman Guntram Schneider presented 10 ideas for creating sustainable community-level budgeting and public finance policies.

According to the paper, government officials at the national, state and local level must work together to find solutions for the precarious financial position of the state’s cities and towns. What are needed are not “financial tug-of-wars between the different levels of the federalist system,” but “funding policies that will remain viable over the long term.” The report notes that communities need robust funding structures, something that is increasingly difficult to achieve, since their core responsibility is to provide a foundation for communal life, including equal access to the basic goods and services needed by the public. The goal must therefore be to put the state’s cities and towns in a position to meet this responsibility. 

The paper also notes that communities are the key drivers of economic growth on the local level, and that after many years of neglect an “immense need for investment” now exists. Public debt at the local level must therefore be reduced if communities are to be able to make the necessary investments that generate growth and jobs.

The joint Bertelsmann Stiftung / DGB NRW paper (in German) can be downloaded from the sidebar on the right.

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