According to the president of the German Association of Districts, Reinhard Sager, 219 out of 294 districts in Germany were in deficit in 2021, unable to balance their budgets. Sager attributed the worsening financial situation to the continuous allocation of new tasks to districts and the increasing number of regulations, leading to excessive bureaucracy.
Without a change, voluntary spending on sports clubs, museums, libraries, and music schools may be reduced or eliminated. Sager called for adequate financial support from the federal and state governments.
The SPD vice-chair, Anke Rehlinger, emphasized the urgency of a solution to address the mounting debts of affected municipalities, enabling them to invest rather than manage scarcity. The SPD party leadership intends to pass a resolution demanding relief for financially burdened municipalities within the current legislative period.
The Federal Ministry of Finance previously proposed a debt relief plan that would require a constitutional amendment to include municipal debt under the debt brake. However, according to reports, the CDU and CSU are resisting the proposal.
The financial crisis in districts has raised concerns, with the FDP's Federal Minister of Finance, Christian Lindner, examining the 2025 budget plan for constitutional risks. The FDP opposes tax increases and the weakening of the debt brake, suggesting that the €5 billion budget gap could be addressed by cutting social and development aid.
The budget proposal is scheduled for August with a target for approval by the end of November.
