Billion-euro deficit: City budgets are "collapsing right now"

Cities and municipalities fear budget shortfalls of up to 36 billion euros this year and are urgently demanding relief for social costs and administrative tasks. The top issue is not the citizens' allowance, but care, said the President of the Association of German Cities, Burkhard Jung.

"In our opinion, there is too much talk about citizens' income in the welfare state debate and too little about other areas," said the Mayor of Leipzig. He added that the federal government really needed to get its act together with the federal states and local authorities. "The municipal budgets are collapsing right now," said Jung. There is no more time to take baby steps.

Care costs for Leipzig doubled

It has now become the rule that social welfare offices have to cover the personal contribution for care homes because residents cannot pay for them themselves, said Jung. For Leipzig, for example, the costs have doubled from 50 to 100 million euros in recent years.

From 2023 to 2024 alone, the municipal expenditure for care shares across Germany increased by 17.7 percent to five billion euros, said Christian Schuchardt, Chief Executive of the Association of German Cities. According to the association, child and youth welfare and integration assistance for people with disabilities are also becoming increasingly expensive.

Municipalities with a list of demands

In concrete terms, the Association of Cities is making a whole series of proposals to give itself more financial breathing space:

• The federal and state governments should transfer a larger share of sales tax directly to the municipalities.
• According to the association, the personal contribution to care should be capped - which would relieve the burden on care home residents and local authorities, but would shift the costs to care insurance or other budgets.
• The administration of services such as vehicle registration and the payment of parental allowance, housing benefit or student grants should be standardized and centralized - the local authorities hope that this will allow them to deploy staff differently and save money. According to Schuchardt, there is no nationwide estimate of how much relief this would bring.
• In principle, bureaucracy should be reduced and procedures digitized - leaner procedures and random checks instead of verification requirements are the keywords.

Relief in the accommodation of refugees

Migration and the accommodation of refugees - a major issue for local authorities in recent years - were not the main focus this time. The number of new arrivals is falling, said Jung. Specifically, he had been able to dismantle three tent cities in Leipzig. "That is a great help." Tasks such as integration, daycare provision, language courses and psychosocial support remain, he emphasized. This is also underfunded.