Municipalities need billions from the federal government

Cities and municipalities say that the financial burden is growing beyond their control. Social spending is rising, which is also due to the high number of refugees. Above all, however, local authorities lack the money to invest. A three-digit billion sum is missing to repair the infrastructure.

Deficits, investment backlog, high social spending: Local authorities are calling for better funding from the federal and state governments. "The financial situation is precarious," warned the President of the German Association of Towns and Municipalities, Uwe Brandl, at the annual press conference in Berlin. "A 'business as usual' approach will not work."

The large influx of refugees is also pushing local authorities to their limits. Brandl and Managing Director André Berghegger explained that Germany could not take in an unlimited number of people. "We therefore need a change of direction in migration policy at both European and national level." Immigration must be organized, controlled and reduced. Many citizens are committed to helping people who have fled to Germany. "However, we have to realize that dissatisfaction is growing," said Brandl. The costs were rising immensely and the money would be lacking elsewhere.

In the current year alone, local authorities will face a financial deficit of ten billion euros. That is 19,000 euros per minute. There has been a lack of money locally for years to invest sufficiently. The consequences are becoming increasingly visible. "The infrastructure is crumbling, roads and public buildings are in great need of renovation and schools and sports facilities are in poor condition," said Brandl. "We have an immense renovation backlog." It now amounts to 166 billion euros.

More money must therefore be channeled into investments, said Brandl. This would require a bundle of measures - such as a moratorium on new benefit commitments and a realignment of the federal government's funding programs. In addition to maintaining the existing infrastructure, many billions would also be needed for climate protection, climate adaptation and the restructuring of the energy supply. This cannot be financed locally alone. Cities and municipalities now spend more than 70 billion euros a year on social services - a doubling since 2005. A further increase is to be expected.

"In times of tight budgets, these rising costs have to be bought at a high price by foregoing investments," explained Brandl. "This trend cannot be allowed to continue." Investments must be given priority. To achieve this, it is necessary to exploit savings potential across all levels of government and not make any new promises of benefits. "The state can only distribute what it has previously collected in taxes."

A stop sign is also required for new and higher social benefits without counter-financing. The federal government often decides on benefits that the municipalities have to finance. "That cuts the municipalities off," emphasized Brandl. They are also calling for federal funding programs to be made less bureaucratic. There are currently more than 100 federal funding programs relevant to municipalities. "The funding jungle must be cleared up," demanded the Association of Towns and Municipalities.