German local government associations are pressing the incoming federal administration for substantial structural reforms to aid municipalities. The German Association of Cities and the German Association of Counties have both expressed a need for relief beyond the special infrastructure funds, which are planned to receive significant investment. While these associations welcome the proposed massive expenditure, they insist on additional support to ease the financial burdens on local governments.
Markus Lewe, President of the German Association of Cities, emphasizes the importance of distributing the 100 billion euros from the infrastructure fund directly to local governments. Lewe notes that municipalities are responsible for essential services like schools and hospitals and play a key role in implementing the energy transition. However, he warns against tax cuts that would further strain municipal budgets, which already receive a disproportionately small share of tax revenues.
Similarly, the German Association of Counties highlights the severe financial challenges facing local governments, predicting a deficit of at least 20 billion euros by 2024. Achim Brötel, President of the association, calls for a tripling of the municipal share of sales tax to secure their financial stability. The counties are also seeking increased federal support for social services, pointing to significant shortfalls in funding for housing costs for refugees.
As Germany prepares for significant infrastructure investment, these associations stress that without meaningful reforms and increased financial support, local governments will struggle to maintain essential services. The ongoing coalition negotiations in Berlin could be pivotal in determining the extent of the federal government's commitment to addressing these pressing issues.
