Municipalities in the debt trap: poorly off

Municipalities in the debt trap: poorly off

Splashing around in the newly planned swimming pool, borrowing books or hanging out with friends in the youth center: These are offers for the around 16,000 people in the town of Hückeswagen near Cologne that you really don’t want to do without. Although you really should.

Like many other municipalities, the city has been in debt for years. For the city’s treasurer, Isabel Bever, there is one problem in particular: “The municipalities have been structurally underfunded since the 1980s and something has to change at the heart of the problem and not just the symptoms.”

expensive required tasks

Bever describes a vicious circle. For example, Hückeswagen had to pay a levy to the district. The amount demanded would not even be covered by the city’s tax revenues. In addition, there are always additional tasks that the municipality has to shoulder financially. Housing benefit, climate protection and mobility are just a few examples. These tasks are so-called mandatory tasks that the respective municipality must carry out by law. The city has little room for maneuver here.

Saving measures have already been implemented in other areas, such as staff. However, this is already causing problems for the city in view of the shortage of skilled workers, according to the treasurer.

The last savings potential would only be in voluntary tasks of the municipality, i.e. above all in sports and cultural offers. This would result in a loss of quality of life for citizens. In the case of Hückeswagen, specifically: no more new swimming pool, no city library and no more youth center.

The mountain of debt is growing

As a municipality, Hückeswagen is not alone in this. Figures published by the Federal Statistical Office at the end of June show that local government debt increased by EUR 2.7 billion in the first quarter of this year compared to the end of the year.

For Kämmerin Bever it is clear: “A city is a living space for people, nothing falls out of the sky. Whether it’s the street, the lantern or the service of the authorities. Everything we want costs something. The citizens have to do this too have consciousness.”

And at the same time, in her opinion, not everything can remain as it is: “We need reforms and have to ask ourselves the questions: Which public tasks must take place at which state level in the future so that they can be carried out most effectively?” The treasurer sees the federal government as responsible for tasks affecting society as a whole, such as climate protection.

A proposal that the general manager Gerd Landsberg from the German Association of Towns and Municipalities would also welcome. The catch: This requires, among other things, a change in the Basic Law – which requires a two-thirds majority in the Bundesrat and Bundestag. According to Landsberg, coastal protection, which is already shared between the federal and state governments as a joint task, could serve as a model.

Not just a question of money

Political scientist Paula Tuschling from the University of Bonn also sees a need for reform. But what the Association of Towns and Municipalities is proposing, she criticizes as unrealistic: “If the redistribution of tasks is not fundamentally reformed and extended to other policy areas, the addition of new joint tasks will tend to promote further interdependence between the federal government, the states and the municipalities, which will make the decisions more complicated and makes it more confusing.”

In her opinion, the reform cannot be all about money: “Instead, the municipal financial situation must be more closely integrated into a comprehensive federalism reform.” According to the scientist, the cooperation between federal, state and local authorities would have to be designed less in terms of legislation and implementation and more in a task-oriented manner.

She also finds the concept of citizens’ councils and participatory budgeting at the municipal level useful. In this way, citizens could directly decide where, for example, they should save and where they should invest. And that could also increase confidence in democracy.


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