Association of cities and municipalities expects financial deficit of ten billion euros in 2024
Cities and municipalities have been lacking money to invest for years, and the effects are becoming increasingly apparent, Brandl emphasized. Many tasks could "not be completely fulfilled" by local authorities with the funds currently available.
The infrastructure of roads and public buildings, for example, is in "immense need of renovation", emphasized Brandl. The Association of Cities and Towns also expects considerable funding gaps in the coming years, as shown in the annual report presented on Wednesday. According to the report, there will be a shortfall of 8.6 billion euros in 2025 and 8.2 billion euros in 2026.
Social costs in particular are placing a financial burden on cities and municipalities. Expenditure in this area has become "excessive" at more than 70 billion euros per year, said Brandl. This means that the amount has more than doubled since 2005. An increase to 80 billion euros is expected by 2025.
The backlog of investment in infrastructure, on the other hand, currently stands at 166 billion euros. In addition to dilapidated roads and schools - which together account for more than half of this amount - money is urgently needed for administrative buildings, sports facilities and fire departments.
Brandl called for municipal spending blocks to be put to the test and prioritized. There is "enormous potential to save money without putting people in need," said Brandl, citing non-income-related assistance with school transportation and care services as examples of potential savings.
The head of the association also warned against making promises of benefits without showing how these are to be financed. "That's out of date," said Brandl, who is also First Mayor of Abensberg in Lower Bavaria. "We need to send a clear signal to people that not everything that is desirable will be affordable in the short or even medium term." The state can only distribute what it has previously collected in taxes.
The care and accommodation of refugees also continues to be a major financial and organizational concern for local authorities. André Berghegger (CDU), the new Chief Executive of the Association of Cities and Towns, called on the federal and state governments to cover all costs incurred in this context. In many places, there is little or no accommodation available and volunteers have "reached their limits and are exhausted".
Berghegger demanded that refugees should only be distributed to the municipalities once they have a clear prospect of staying. The further influx must be managed, controlled and limited so that the municipalities have "breathing space" again, he emphasized.
The association is also calling for the so-called "connexity principle" to be enshrined in constitutional law, according to which services are only paid for by the level - such as the municipalities - that has previously decided on them. "At the moment, we often have a situation where the federal government decides on services that the local authorities then have to finance," emphasized Brandl. This cuts the municipalities off.
The association is also calling for the federal government to realign funding programs and make them less bureaucratic. The municipalities should receive a higher share of the sales tax.
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- By 2024, the Association of Cities and Municipalities anticipates a financial deficit of ten billion Euros, a figure that Brandl finds concerning.
- Uwe Brandl, the head of the association, highlighted the need for renovation of public infrastructure, including roads, schools, and even fire departments.
- Climate protection measures and the accommodations for refugees are among the factors contributing to the financial burden on municipalities, as stated by Brandl.
- The CSU, along with other cities and municipalities, is facing a significant financial deficit in 2024, as calculated by the commune.
- The financial shortfall in 2024 is expected to be followed by another billion-euro deficit each year in 2025 and 2026.
- Uwe Brandl emphasized the importance of prioritizing municipal spending blocks and saving money in areas such as non-income-related assistance with school transportation and care services.
- Berlin, as well as other cities and municipalities, is not exempt from the financial deficit, with the Fire department potentially requiring significant investment.
- The Association is calling for the federal government to cover the costs of refugee accommodations and for a constitutional amendment of the "connexity principle" to prevent financial burden on municipalities.
- The association also suggests realignment of funding programs and a higher share of sales tax for municipalities as potential solutions to the financial deficit faced by cities and municipalities in 2024.
Source: www.stern.de
