Municipalities in Germany: Record Finance deficit of 24.8 billion euros!

Municipalities in Germany: Record Finance deficit of 24.8 billion euros!

The financial pressure on municipal households in Germany has increased significantly in recent years. In 2024, Germany recorded a record -finance deficit of 24.8 billion euros, the highest since reunification in 1990. This represents a dramatic increase compared to 2023 when the deficit was still 6.6 billion euros. According to the Federal Statistical Office for this increase are the increased expenses for social benefits, in particular due to increased rules for social assistance and civil allowance.

The challenges are particularly noticeable at the local level. According to RP online , the expenditure for social benefits rose by 11.7 % to a total of 84.5 billion euros. The expenses for social assistance that are regulated according to the SGB XII increased by 12.4 % to 21.1 billion euros, while the expenses for integration aids according to SGB IX rose by 13.6 % to 22.7 billion euros. These figures illustrate the enormous pressure that is on the municipal households.

increase in social benefits in Hilden

A particularly alarming trend is shown in the city of Hilden, where the number of applications for educational and partial help from the education and participation package NRW has increased significantly. The number of cases more than doubled from 1,283 in 2022 to 2,400 in 2024. The growth in school aids and lunch catering, which are due to the increasing cost of living, are particularly striking. RP Online documented an increase in school aid cases from 476 (2022) to 839 (2023).

The lunch catering even recorded an increase to 812 cases in 2024. Such developments mean that the urban cash registers are added to the district levy, which leads to an increased need for financing.

financing problem

The municipalities have to fall back on financial reserves or loans to cover the increasing costs. In 2024, 6.2 % of municipal expenses were not covered by regular income. While the adjusted income of municipal core budgets rose by 3.5 %, personnel expenses grew by 8.9 % to 88.1 billion euros, which increases the financial pressure.

The counties in North Rhine-Westphalia therefore call for a fundamental realignment of social policy and the financial distribution between the federal government, the states and the municipalities. The current situation requires a rethink so that municipal households can be stabilized in the long term. The NRW district council sees an urgent need for action in order to distribute the financial burdens sensibly and effectively support the municipalities.

Overall, it can be seen that the municipalities face enormous challenges. The big climbs in the social benefits and the associated deficit make it clear that an immediate need for action is required to avoid future financial bottlenecks.