Municipalities in need: 25 billion euros missing – summit should help!

Municipalities in need: 25 billion euros missing – summit should help!

The financial difficulties of municipalities in Germany are serious and require urgent measures. Loud ZDF Today Many communities have massive problems covering their expenses and are struggling with an investment backlog of around 25 billion euros nationwide. This financial emergency is the focus of a federal-state summit in which Federal Chancellor Friedrich Merz will also take part.

Among other things, the federal government plans to improve tax depreciation options for companies that produce machines, devices and electric cars. This could also benefit municipalities in the long term. However, the states are demanding appropriate compensation for the tax losses through the current relief package, as the financial situation of the municipalities has been tense for years. Among other things, districts such as the Rheingau-Taunus district, which is underfinanced by 153 million euros, are suing the Federal Constitutional Court against this misery.

Criticism of underfunding

The cost pressure on municipalities is increased by legal requirements such as the Federal Participation Act, which increases social benefits. As a result, many communities, such as in the Rheingau-Taunus district, feel left alone. CDU district administrator Sandro Zehner sharply criticizes the situation and calls for greater support from the federal and state governments. The German District Association also draws attention to the need for additional help.

The financial impact of the free entitlement to full-day care, which is due to apply from 2026, is particularly challenging. The headmistress of the Äskulap primary school in Schwerte, Kirsten Jochim-Thomas, reports insufficient space and financial bottlenecks. The municipality only has 80,000 euros available to equip a new school building.

Financial support from the federal government

Despite the tense financial situation of the municipalities, the Federal Ministry of Finance shows in a recently published overview that the federal government offers various ways of financial support. This includes financial aid, participation in cash benefit laws and the assumption of costs for important municipal tasks. Since 2018, municipalities have received 5 billion euros annually to strengthen their financial strength, which means a significant increase in support since the crisis years.

A total of 10.9 billion euros are planned for basic security in the federal budget for 2024. In addition, the federal government contributes 70 percent of the accommodation costs for financially weak municipalities, which represents important support, especially in times of need. From 2025, support for local public transport will be increased to 2 billion euros annually.

However, the federal government's diverse support offers must be placed in a larger context. The federal government bears full responsibility for the living costs of asylum seekers in need of assistance and supports the states in the area of ​​digital administrative services. This substantial financial support is an important step in addressing the challenges facing municipalities, but it remains to be seen whether this will be enough to bridge the gap between municipalities' financial needs and available resources.