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SSG: Double budget hardly relieves municipalities

The Saxon Association of Towns and Municipalities considers the state's double budget to be inadequate (archive photo). / Photo: Sebastian Willnow/dpa/ZB
The Saxon Association of Towns and Municipalities considers the state's double budget to be inadequate (archive photo). / Photo: Sebastian Willnow/dpa/ZB

The criticism comes even before the resolution is passed. The cities and municipalities consider their financial resources to be inadequate. The state's new double budget will not change this, they say.

In the opinion of the Saxon Association of Towns and Municipalities, the double budget for 2025/2026 will hardly lead to any relief for the municipalities in the Free State. The municipal cash flow statistics for the first quarter of 2025 once again show the massive financial pressure that Saxony's municipalities are under, according to the umbrella organization. "The double budget does not provide any solutions that the state would currently like to use to help its municipalities out of their precarious budgetary situation."

Saxon municipalities' deficits are increasing

"Saxony's municipalities had to record a deficit of minus 702 million euros in their core budgets in the first quarter of 2025. This means that the deficit in the first quarter of 2025 significantly exceeds that of the entire previous year (2024: minus 682 million euros) and almost doubles the deficit in the same quarter of the previous year (Q1 2024: minus 392 million euros)," it said. The main reasons cited were rising personnel expenses and social security costs as well as falling revenue.

"The record deficits at the municipalities are being met with declining allocation quotas from the state. According to the plans of the four state parliamentary groups involved, the municipal share of the state budget will fall from 34.6% in 2024 to 33.7% in 2025 and only 32.3% in 2026," explained SSG Managing Director Micha Woitscheck. What sounds like just a few percentage points is a dramatic development. One percentage point amounts to more than 250 million euros.

Smaller scope for municipal investment

Woitscheck referred to the shrinking scope for investment. According to the state budget estimates, the allocations for municipal investments will be almost halved, from 1.3 billion euros in 2024 to 834 million this year to just 658 million in 2026. Many municipalities are in a precarious budgetary situation and have to keep their heads above water with cash loans. "We appeal to the state to ensure substantial improvements in municipal finances with the 2027/2028 double budget at the latest."

Prime Minister Michael Kretschmer (CDU) regretted during the budget debate in the state parliament that the financial possibilities for supporting the municipalities are limited. "We are helping to the extent that we can for the Free State of Saxony," he said.

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