The New Revenue-sharing Act 2008: Fundamental Act Reform Postponed Again

In December 2007, the new Revenue-sharing Act (Finanzausgleichsgesetz, FAG) 2008 was passed after negotia-tions between the revenue-sharing partners were completed ahead of schedule. Thus, the agreement on the sys-tem of federal fiscal relations in place since 2005 has been replaced by a new agreement one year earlier than planned and is to last six years instead of the four as up to now. This mode of procedure was necessary because of the need to reach agreement between the federal levels regarding their shares in the financing of the various re-form packages of the federal government (especially with respect to the means-tested basic income and the 24-hour homecare issues).