Huge renovation backlog
Municipalities need billions from the federal government
January 3, 2024, 12:16 p.m
Cities and municipalities say the financial burdens are becoming overwhelming. Social spending is increasing, which is also due to the high number of refugees. Above all, municipalities lack the money for investments. A three-digit billion sum is missing to repair the infrastructure.
Deficit, investment backlog, high social spending: the municipalities are demanding better financial resources from the federal and state governments. “The financial situation is precarious,” warned the President of the German Association of Cities and Municipalities, Uwe Brandl, at the annual press conference in Berlin. “‘Business as usual’ won’t work.”
The large influx of refugees would also push the municipalities to their limits. Brandl and managing director André Berghegger explained that an unlimited number of people could not be accepted into Germany. “We therefore need a change in migration policy at both the European and national level.” The influx must be ordered, controlled and reduced. Many citizens would get involved in helping the people who have fled to Germany. “However, we have to note that dissatisfaction is growing,” said Brandl. The costs rose immensely and the money would be missing elsewhere.
In the current year alone, municipalities will run into a financial deficit of ten billion euros. That’s 19,000 euros per minute. There has been a lack of money locally for years to invest sufficiently. The consequences would become increasingly clear. “The infrastructure is crumbling, roads and public buildings are in great need of renovation and the schools and sports facilities are in poor condition,” said Brandl. “We have a renovation backlog that is immense.” It now totals 166 billion euros.
Social spending doubled
Therefore, more money must be channeled into investments, said Brandl. This requires a package of measures – such as a moratorium on new service promises and a realignment of the federal 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 annually on social services – a doubling since 2005. A further increase is expected.
“In times of tight budgets, these rising costs have to be paid for dearly by foregoing investments,” explained Brandl. “This development must not continue like this.” Investments must be given priority. To do this, it is necessary to exploit savings potential across all levels of government and not to make any new performance promises. “The state can only distribute what it 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 services that the municipalities have to finance. “That cuts off the municipalities’ breath,” emphasized Brandl. They also call 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 out,” demanded the Association of Cities and Municipalities.