Amid an increasingly strained financial situation, local governments in Saxony have cut their infrastructure investments by nearly one-tenth. Last year, 390 euros per resident were spent on construction projects in Saxony’s cities and municipalities, according to a recent survey of municipal finance offices commissioned by the KfW development bank. This represented a decline of 9.8 percent. Nationwide, however, spending rose by 4.3 percent.
Municipal Budgets Remain Under Pressure
KfW continues to view the municipal financial situation as strained. Nationwide, 70 percent of municipal finance offices assess their situation as negative. According to the authors, rising expenditures are hindering urgently needed investments in municipal infrastructure.
While municipal revenues in Saxony fell slightly by 1.1 percent last year, expenditures remained roughly at the same level (up 0.1 percent). The financing deficit stood at 265 euros per resident, which was significantly lower than the national average of minus 413 euros.
