Finances - Municipalities receive slightly less money from financial equalization
Cities, municipalities and districts in the south have received slightly less money from the communal financial equalization this year than the previous year. According to the Statistical State Office in Fellbach near Stuttgart, the communes received allocations amounting to 14.3 billion Euro in 2023. This is 120 million Euro less than the previous year. On average, the communes therefore received 25 Euro less per inhabitant than in 2022. Since 2004, the allocations have increased every year, as a spokesperson for the State Office stated.
The most important item in the financial equalization, according to the Statistical State Office, are the so-called key allocations. These are used to finance communal tasks that these cannot finance through their own tax revenues. They amounted to 8.9 billion Euro in 2023 and are mainly based on the population size of the municipalities.
The communes are afraid of significant cuts in allocations from the financial equalization from 2025 onwards. The reason for this is the results of the Census 2022, which for some municipalities showed significantly fewer inhabitants than previously assumed. The new figures will for the first time partially influence the calculations for the financial equalization from 2025 and will then form the sole basis from 2026.
The financial equalization in Baden-Württemberg's municipalities, including Fellbach, experienced a decrease this year, falling from 14.4 billion Euro in 2022 to 14.3 billion Euro in 2023. This decrease in finances has raised concerns among municipalities about potential cuts in the future. The County's finances are closely tied to this financial equalization, as it relies on these allocations to finance communal tasks it cannot cover through its own revenues. The Southwest region, including cities like Stuttgart, is also affected by these changes. The key allocations, a significant component of the financial equalization, are primarily determined by the population size of the municipalities.
