German municipalities demand fair funding as financial strain reaches breaking point
The German Association of Towns and Municipalities (DStGB) has issued a legal opinion on municipal financing, warning of overburdening and underfunding of local governments. Presented on Tuesday, the report calls for direct funding and adequate resources.
DStGB President Ralph Spiegler proposes establishing a direct funding channel from the federal government to municipalities. This comes as local governments handle roughly 70% of public tasks but receive less than 15% of total revenue. The report concludes that local governments have constitutionally guaranteed rights to adequate and minimum financial resources.
The report highlights the increasing burden on local governments, with spending on social services more than doubling over the past 20 years, reaching around €80 billion annually. Spiegler urges exploring alternative financing models to enable cities and towns to carry out their constitutional mandates. DStGB's chief executive, André Berghegger, accuses state governments of avoiding financial responsibilities under the principle of Konnexität.
Nearly all German municipalities face creeping overburdening, warns DStGB. To address this, the association calls for state governments to provide municipalities with sufficient funding for independent decision-making. The report serves as a reminder of the crucial role local governments play and the need for adequate funding to support their tasks.
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