Local authority cash flow analysis: deficit of over one billion euros

The cash flow analysis of Saxony's municipalities has revealed a deficit of over one billion euros for 2025. The Saxon Association of Towns and Municipalities (SSG) spoke of a "dramatic negative record". This means that the deficit for 2024 (around 682,000 euros) has been exceeded by more than 50 percent. Higher revenues from sales tax and income tax had not been able to compensate for declines in trade tax.

Municipalities on the brink of being unable to act

"The cash statistics show in black and white what we have been warning about for years. The structural underfunding of local authorities is leading cities and municipalities to the brink of being unable to act," explained SSG President Bert Wendsche. In many places, there is barely enough money for the bare essentials. "Investments are being postponed, infrastructure is wearing out, voluntary services are disappearing - the financial plight has long since become part of people's everyday lives."

Association calls for tangible relief

"The cities and municipalities need funding that does justice to their tasks. State politicians must finally understand that they have a duty to the municipalities. We need noticeable relief in terms of tasks and standards and we need significantly higher state allocations to the municipalities," emphasized Mischa Woitscheck, Managing Director of the SSG.

According to the SSG, the current municipal finance report shows a central reason for the imbalance that has occurred. "Saxony is now at the bottom of the list of eastern German states in terms of state allocations to its municipalities. Ahead of the upcoming decisions on future municipal funding, the state government and state parliament therefore have a duty to finally follow up their political promises with concrete improvements," it said.