Mayors push for federal billions to be distributed

The President of the Association of German Cities, Leipzig's Lord Mayor Burkhard Jung (SPD), is calling for the money from the federal government's special fund to be distributed to the municipalities as quickly and generously as possible. "The federal states can and should already be tackling and preparing the state laws on the special fund. We need to get down to business now," said Jung at the conference of mayors of East German cities at the German Association of Cities in Suhl.

100 billion of the federal government's 500 billion debt-financed special fund for infrastructure is earmarked for the federal states. The eastern German cities are in urgent need of the funds, as the financial situation of most municipalities is "dramatic". The money is needed "to make local roads, schools and bridges fit or to push ahead with the expansion of buses and trains".

Jung: Fundamental reform of municipal finances necessary

In Saxony-Anhalt, the state government and municipalities have agreed to distribute 60 percent of the funds available in the state from the debt package to the municipalities. Saxony's Minister President Kretschmer (CDU) had recently announced that he wanted to distribute around two thirds of the funds via the municipal administration. In Thuringia, the state government has not yet commented on this.

In Jung's view, 75 percent is more likely to be needed in each case. In addition, a fundamental reform of the "financial architecture of this country" is needed. "I am not a tax expert, but it is unacceptable that we provide around 25 percent of all state services but only receive one seventh of the tax revenue," said the SPD politician. Solutions are needed for this, such as a higher contribution from the municipalities to the sales tax revenue of the federal and state governments or full long-term care insurance to cushion the rising social expenditure of the municipalities.

He also fears that the states will replace their own allocations to the municipalities with federal money. The needs are huge. The municipalities are responsible for a large part of the tasks and investments. The cities' financial deficit, which has grown dramatically in the past two years in particular, is at an all-time high of 25 billion euros. In addition, there is an investment backlog of 216 billion euros.