Finances in Solingen: The federal government must deliver now – pressure to act is growing!

Finances in Solingen: The federal government must deliver now – pressure to act is growing!

With a serious look at the situation of the municipalities, Daniel Wieneke and Nicole Borninghoff today comment on the challenges brought about by the new federal government and the coalition agreement. Wieneke, treasurer of the city of Solingen since 2022, points out that although the coalition agreement promises improvements for municipal finances, it also emphasizes the need for structural, reliable municipal financing. The gesture of optimism, especially with regard to the 100 billion euros that are supposed to benefit the municipalities, fuels skepticism in Wieneke: “It will not be certain that all the funds will actually arrive,” he says. In particular, he criticizes that Solingen could only receive around 25 million euros per year, which is not enough to solve the financial problems in the long term. Solinger Tageblatt further reports that Wieneke and Borninghoff are calling for structural relief through more money or fewer tasks.

With regard to increasing social spending, which could increase further as a result of new legislative proposals, Borninghoff notes that the use of the term “cause connectivity” in the coalition agreement is particularly important. This means that if standards are raised, the federal government must also provide financial compensation. The pressure to act, which may also affect wealthy cities, creates additional stress in financial planning. Although Borninghoff and Wieneke criticize the way the federal government works, they emphasize that the issues must now be translated into action.

The dangers of a declining financial budget

The warnings stand out clearly in all the pessimism. Bernhard Daldrup, spokesman for the AG Housing, Urban Development, Construction and Municipalities, emphasizes that the ability of municipalities to act is at risk and that this could ultimately make social peace in the country fragile. The financial challenges are characterized, among other things, by an expected financing deficit of up to 17 billion euros for 2024, with the need for restructuring totaling 186 billion euros. This situation urgently requires high investments to secure the future of municipalities, as the SPD emphasizes in its press release. SPD faction also reports on the need for a reform of the debt brake in order to be able to adequately meet the challenges.

In addition, the SPD is calling for a change in the state tax distribution in order to reduce the financial burden on municipalities. The consequences of past challenges, including the pandemic, the energy crisis and inflation, are still being felt and require more responsibility from the federal government. Daldrup reports that numerous funding programs, such as urban development funding with a total of 790 million euros annually, are already in use to strengthen the investment power of municipalities. At the same time, however, the dynamic development of social costs must be slowed down and better financed.

For Wieneke and Borninghoff it is clear that assistance for old debts alone is not enough to improve the budget situation. While political actors continue to grapple with the complex situation, the question of the municipalities' financial future remains pressing. The optimism of individual politicians is perceived as dangerous if it is not based on solid foundations, and a sustainable solution is more urgent than ever.