Burdened by Bureaucracy: Germany's Municipalities Cry for Financial Relief - "Time to Rewrite the Rules"
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Local governments call for financial overhaul - "the one with the orders foots the bill" - Local authorities push for financial restructuring - "those who command, cover the cost"
The call for a transformation in local finances is echoing louder among Hessian counties, cities, and municies. "The biggest issue is that municipalities are left high and dry by federal and state authorities," Offenbach city reported to the German Press Agency in response to a query. They're demanding the principle of "who orders, pays" - akin to the legal claim to full-day care, is finally enforced.
Surging costs due to federal regulations
Social welfare offices, job centers, immigration services, civil defense, or public transportation: "Many tasks of the county administration are grounded in federal laws," Bergstraße district stated. "The financial impact stretches across personnel costs, material costs, and benefit payments." Counties often find themselves ensnared in an intricate web of laws and administrative regulations, as the German Association of Towns and Municipalities also pointed out. "Municipal additional costs due to federal laws need to be curtailed."
"Crippling" cuts necessary
As per Offenbach, an estimation for the year 2025 suggested that approximately 85 percent of the city's budget is dedicated to mandatory expenditures driven by federal laws. Consequently, "crippling" cuts had to be implemented this year. "Specifically, we had to slash the budget for street, sidewalk, and bike path maintenance, and we also had to decrease funds for building maintenance," they said.
Deficit skyrockets
The mayors of municipalities and cities in the districts of Offenbach and Bergstraße recently addressed their strained finances. "More tasks are being transferred from the federal and state governments – without proportional financial compensation," a statement from Bergstraße district stated under the banner "Financial distress of municipalities is no accident." The deficit has nearly quadrupled to its highest level since reunification.
The Federal Statistical Office reported a deficit of 24.8 billion euros for municipalities (excluding city-states) in 2024 in core and extra budgets in a preliminary statistic. A year earlier, it was 6.6 billion euros. Social benefits were the main drivers of expenditure.
Limited room for maneuver in some cases
"The financial situation of the municipal level is dire," a statement from the community leaders in the Offenbach district stated. "The shifting of burdens will lead to performance restrictions or further increases in property and business taxes." The demands on state action need to be urgently revised to match available resources. The Offenbach district is bound due to the expenditure for youth, social, and integration aid.
In January, county councilors from the north Hessian counties of Schwalm-Eder, Waldeck-Frankenberg, Werra-Meißner, Kassel, and Hersfeld-Rotenburg signed a resolution to the federal and state governments under the motto "It's five past twelve! The money is missing!" In it, they criticized the lack of funding and demanded, among other things, an adjustment of the distribution of tax revenues.
- Municities
- Offenbach
- Financial reform
- Finances
- Wiesbaden
- German Press Agency
- Youth
- Employment office
- German Association of Towns and Municipalities
- The municipalities in Hessian counties, cities, and towns are becoming increasingly vocal about the need for financial reform, echoing concerns over their dire financial situation.
- Offenbach is one such city, expressing concern over the principle of "who orders, pays" not being enforced, as they're shouldering surging costs due to federal regulations in areas like social welfare offices, job centers, immigration services, civil defense, and public transportation.
- The mayors of municipalities and cities in the districts of Offenbach and Bergstraße have addressed their strained finances, with the deficit nearly quadrupling to its highest level since reunification.
- The community leaders in the Offenbach district are bound by expenditure for youth, social, and integration aid, limiting their room for maneuver in some cases.
- In January, county councilors from several north Hessian municipalities signed a resolution to the federal and state governments, criticizing the lack of funding and demanding an adjustment of the distribution of tax revenues.