Minister of Finance Monika Heinold: Proper funding is crucial for success – Investments in the education infrastructure in Schleswig-Holstein in light of the debt-brake

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The “debt-brake” was introduced with the goal of preventing German federal and state governments from borrowing money and reducing their respective fiscal deficits. Every year, this poses an enormous challenge for Schleswig-Holstein. But no expenses should be spared for the education infrastructure as it is the fundamental requirement for a positive social development and a strong business location.

 

Proper funding is crucial for success – Investments in the education infrastructure in Schleswig-Holstein in light of the debt-brake. Whether streets, bridges, hospitals, universities and universities of applied science, day care centres and schools, culture or broadband network – large investments are needed in several areas in Schleswig-Holstein. But the state’s financial resources are limited. Since 2010, the debt-brake has determined our consolidation course and clearly defines the expenditure framework. As a consolidation state, Schles­wig-­­Holstein is being monitored by the Stability Council during the restructuring proceedings. The structural budget deficit is to be completely eliminated by 2020, meaning that revenue and expenditure have to balance out again. This is a difficult path to take, albeit a sensible one, as we need to get out of the decade-­old habit of incurring debt. The state’s nearly 27 billion euros in debt are more than enough of a burden for future generations.

But reducing expenditures alone will not make Schleswig-Holstein well set for the future. We must use what leeway exists in the expenditure framework for sensible investments. There­fore, the state government has come up with targeted priorities: Education is at the top of our list.

It starts early on, in day care centres. In 2012, the coalition agreement between the ruling Social Democrats (SPD), the Greens party (Grüne) and South Schleswig Voters’ Association (SSW) called for the incremental increase of operating subsidies for U3 day care centres until 2017 by an annual sum of 80 million euros. We also increase the quality and support the municipalities in the energy efficiency-oriented renovation of many facilities – for example with the SchuKi (energy efficiency-oriented renovation of schools and day care centres) program with 11.5 million euros. In total, the state plans to spend over 220 million euros in 2016 on subsidies for operating costs and investments as well as additional federal and state funds on ensuring the quality development in the support for children in day care centres and day care. As of 2017, parents will be relieved of some of the burden of paying for day care. Day care for children under the age of three – in a day care centre or by a day care provider – is supported with up to 100 euros per month. A total of 23.4 million euros will be provided for this in 2017.

The provision of education will be improved. We also highlighted our priorities in the education sector with 36.4 million euros which have become available from released German Federal Law on Training and Education Promotion (BAföG) funding. In 2017, this will improve the provision of education in schools by creating jobs for 728 teachers. Another crucial element was the current state government’s decision to leave half of the financial re­­sourc­­es which are becoming available due to the decrease in pupils in the school system. The financing of 542 educational assistants and the support for municipalities in their school-related social work by the state will round off the funding package with an amount totalling 17.8 million euros.

Challenging number of refugees. We must also plan for financial leeway for current challenges – for example, to be able to react appropriately to the uncertain number of refugees. Thus, admitting and integrating refugees is one of the primary tasks in 2016, which can only be managed with tremendous financial support.

And here too, the state government acted: 240 jobs were created with the supplementary budget for 2015 and another 280 jobs were created with the budget for 2016 in order to support refugee children in learning German. Furthermore, the state government decided to provide 200 additional teaching jobs as of August 1, 2016 and February 1, 2017, respectively. These jobs were created since 11,000 refugee children are now in need of education.

They are also part of our overall package: This allows us to have more than 2,000 additional teachers at our schools by the end of this legislative period, than were planned by the previous government.

Supporting municipalities. Another important building block in our investments in education infrastructure are the funds provided for Schleswig-Holstein by the federal government via the Kommunalinvestitions­förderungs­gesetz (Municipality Investment Promotion Act) for financially weak municipalities. In Schleswig-Holstein, we plan to provide these funds of about 100 million euros for promoting municipal investments in the energy efficiency-oriented renovation of schools and day care centres. The pre-determined municipalities have been able to draw on these funds for their measures since the end of 2015 and merely need to cover 10 per cent of costs themselves.

Renovation of universities and the Higher Education Pact. The state government also supports universities: We pay for the tariff increase, have created special funds of 85.6 million euros for the energy efficiency-oriented renovation of university facilities. Early on we expressed our firm commitment to the universities that we would fund the third phase of the Higher Education Pact as of 2016. In addition, previous core funding of higher education institution in Schleswig-Holstein will increase by 10 million euros as of 2016. From 2017 to 2019, funding will increase annually by 5 million euros, which means that universities will record an increase of then 25 million euros annually as of 2019.

Schleswig-Holstein is a consolidation state and we can still make a difference by using the resources that are available to us wisely. I am convinced that every cent invested in education is the right decision. A well-known quote of John F. Kennedy sums it up: “There is only one thing in the long run more expensive than education: no education.”

0015-staffel-2-149-Heinold-hochMinisterin Monika Heinold
Since June 12th, 2012, the author is the Minister of Finance of the State of Schleswig-Holstein. Prior to that she was a member of the Landtag (state parliament) as parliamentary secretary, Deputy Chair of the Finance Committee, member of the working group “Budgeting” of the Finance Committee and member of the Social Committee.