Financial disaster! Hessen fights against municipal deficits of 24.8 billion euros

Financial disaster! Hessen fights against municipal deficits of 24.8 billion euros

The financial situation of the Hessian municipalities is tense. The city of Offenbach has described the situation of the municipalities as desolate and, according to n-tv.de In particular, the principle "who ordered, paid" is highlighted, since many municipal tasks are anchored by federal laws. These laws lead to considerable financial burdens for cities and municipalities.

in 2025, Offenbach uses 85 percent of his budget for mandatory expenditure, which results from these services prescribed by federal law. As a result, painful savings became necessary, which, among other things, resulted in halving the funds for road and cycle path renovations. The pressure on the municipalities is growing, which is also evident in a dramatic increase in the deficit. This has quadrupled in last year and thus reaches the highest level since reunification.

financing deficit in Hesse

The Hessian Statistical State Office has published preliminary figures for 2024. Accordingly, the financing deficit of the Hessian municipalities is 2.6 billion euros, which corresponds to a negative balance of 410 euros per capita. This is an increase of 2.0 billion euros compared to the previous year, in which the deficit was 597 million euros. In addition, 80.4 percent of Hessian municipalities have a deficit, which is a significant increase in comparison to 2023.

The reasons for this concern for this concern are primarily in the increased increased demand for social, child and youth welfare. In particular, expenditure on social benefits rose by 12.4 percent to a total of 21.1 billion euros. This development means that the core households of the municipalities are heavily burdened. The expenditure increased by 12.6 percent in 2024 compared to the previous year, while the income only increased by 7.6 percent, as well as daily show.de

concrete deficits and challenges

The lack of scope for action by the municipalities is one of the greatest challenges. The district of Offenbach, for example, is not able to make necessary investments due to the high expenses for youth, social and integration assistance. This misery recently prompted the district councilors of North Hessian circles to sign a resolution to the federal government and the country in which they are calling for better financing and striving for adjustment of tax distribution.

These developments and the associated financial bottlenecks indicate that the performance of cities and municipalities is seriously at risk without a fundamental reform of municipal finances.