Future pact for Hesse: municipalities in the financial crisis!

Future pact for Hesse: municipalities in the financial crisis!

In Hesse, numerous municipalities are facing financial challenges caused by increasing tasks and falling income. Prime Minister Boris Rhein (CDU) has therefore announced a pact for the future that is intended to develop concrete proposals to relieve the financial burden on municipalities. The aim is to sustainably strengthen municipal finances, reduce bureaucracy and make optimal use of the federal investment program. The future pact is being prepared by working groups consisting of several ministries, municipal umbrella organizations and the Court of Auditors. Finance Minister Alexander Lorz (CDU) also points out that, in addition to the municipalities, the state and the federal government are also suffering from financial burdens, especially due to the current recession.

Current forecasts illustrate the worrying financial situation: Anita Schneider (SPD), President of the Hessian District Council, speaks of a municipal financing deficit of around 2.6 billion euros for 2024. This represents the largest deficit since the post-war period. In addition, the forecasts for 2025 show a deterioration in the situation, which is viewed with concern by the leading municipal associations. They have welcomed the offer of a future pact and hope for rapid implementation.

Joint discussions about implementation

The talks about the future pact took place between Economics Minister Kaweh Mansoori (SPD), Finance Minister Lorz and Interior Minister Roman Poseck (CDU) as well as the presidents of the municipal umbrella associations. Lorz emphasizes that it is important to quickly use additional funds invested and to simplify the procedures. He calls for more trust in municipalities and fewer regulations in order to increase local ability to act. Mansoori highlights the role of municipalities as the backbone of the country and appeals to the responsibility of cities in the crisis.

Mayor Röder expresses the desire for fewer and simpler rules in order to increase efficiency. The first steps towards relief should be taken through reforms of local law and the reduction of standards in fire and disaster protection. Schneider explains that it is also necessary to better equip the financial equalization fund and not to assign additional tasks without appropriate funding.

The path to the future pact

The future pact should be closely linked to the 2026 budget, which is expected to be passed at the beginning of 2026. Working groups are working on funding, reducing standards and adapting federal law to the capacity of municipalities. Concrete proposals for the future pact are to be developed in the coming months, with the Ministry of Finance taking the lead. While the Green opposition is already demanding concrete commitments, the AfD parliamentary group criticizes the fact that mass migration was not mentioned in the announcement of the pact.

The developments surrounding the Future Pact make it clear how important financial stability is for municipalities. In the current economic climate, this is crucial to maintaining services and promoting regional development.

For further information about the future pact in Hesse, we refer to the reports from stern.de and finanzen.hessen.de.