Berlin's economy performed surprisingly well in recent years. This was revealed by the numbers of the biennial budget 2014/2015, which the senate recently introduced. Accordingly to this the capital can exhibit a balanced budget in the upcoming years and therefore will probably not incur new debts. Even more: Berlin financial management wants to generate reserves in the amount of 130 million euros for the construction of the new airport.
Berlin senate on consolidation course
To achieve this goal, the Berlin government first wants to save costs. The draft for the 2014/2015 budget is based on the consolidation plans of the senate, according to which the net expenditure may only be increased by three percent. Thus, the red-black coalition has imposed stringent austerity regulations than most other states. For the expenses, the senate still wants to implement, a main focus is set. Therefore there will be more financial resources available for example for day care centers and universities. In addition, the districts will be stronger financially supported than currently.
Tax revenues help the economy of Berlin
Another reason for the future balanced budget: Berlin can record tax revenues that exceed the expectations. In 2014 and 2015 there will be each expected additional receipts in an amount of 400 million. One part of the package of measures to increase revenue is going to take place on January the 1st in 2014 by increasing the real estate transfer tax in Berlin from five to six percent. In addition to this the city tax is planned, which is kind of an accommodation tax for tourists.
Another reason for the high tax revenue is the positive economic performance of the city. An important fact and booster regarding their economic situation beside the booming tourism is the dynamic start-up scene. Each year in the Spree-metropolis, approximately 40,000 new commercial properties are registered. In addition, more and more organizations and large companies establish their headquarters or a branch in the capital. This also has a positive effect on the labor market. The positive location of Berlin's economy and also the thriving labor market attracts more and more people for Berlin: in 2012 itself there were nearly 50,000 new residents in the Spree-metropolis.