Bavaria's municipalities are in need of money: debts are rising rapidly to a record high!

Bavaria's municipalities are in need of money: debts are rising rapidly to a record high!

The financial situation of Bavarian municipalities has deteriorated significantly over the past year. The expenditure of cities, districts and municipalities in Bavaria increased by 9.2 percent, while income only increased by 5 percent. This leads to the municipal budgets ending in negative territory, resulting in a deficit of 396 euros per resident. In comparison, the nationwide average is 321 euros per resident, which illustrates the difficult situation in Bavaria. Overall, the municipal financing deficit in Germany amounts to 24.8 billion euros, the largest loss since reunification sueddeutsche.de reported.

A significant aspect of these developments is that 90 to 95 percent of municipal spending is tied to mandatory tasks. The result is inadequate investment in important infrastructure projects such as schools, roads and libraries. The increase in debt in Bavaria is above average compared to the rest of Germany. While municipal securities debts and loans for investments rose nationwide by 10 percent to 1,780 euros per resident, they increased by 14 percent in Bavaria, resulting in total debts of 1,564 euros per resident. However, the level of debt in Bavaria remains lower than the national average br.de notes.

Investment backlog and deficiencies in the infrastructure

The inadequate investments have led to a dramatic renovation and investment backlog. The estimated nationwide backlog amounts to around 215.7 billion euros. In Bavaria, school buildings are particularly affected: 31 percent of the total investment backlog, i.e. around 67.8 billion euros, is in this area. In addition, 56 percent of municipalities report significant or serious defects in school buildings. Other areas are also affected, such as the need for investment in roads (around 53.4 billion euros), fire and disaster protection (19.9 billion euros), administrative buildings (19.5 billion euros) and sports halls and swimming pools (15.6 billion euros).

The situation is getting worse as the number of municipalities that can no longer guarantee the maintenance of their infrastructure is growing. The proportion of municipalities reporting problems with school buildings rose from 11 to 17 percent. An increase from 26 to 32 percent was recorded for roads and transport infrastructure. In this context, KfW Bank expresses doubts as to whether the federal government's special “infrastructure” fund will be sufficient to provide decisive help to municipalities. The President of the German Association of Cities is therefore calling for the funds to be made available quickly and easily, which must be distributed to the municipalities in a targeted and unbureaucratic manner.