Landrat Calls for Shift in Funding of Social Costs - German Chancellor Merz vows aid as local finance crisis deepens across municipalities
Chancellor Friedrich Merz has responded to an urgent appeal from the mayors of all 13 state capitals, pledging support for municipalities amidst a local finance crisis. The appeal highlighted severe pressures from rising social welfare costs, with district administrators nationwide echoing these concerns.
The crisis is evident in Groß-Gerau County, where social transfer payments surged by over €28 million between 2023 and 2024, while fiscal equalization grants fell by €2.6 million in the same period. Chancellor Merz acknowledges these pressures, acknowledging that local governments face severe challenges in youth welfare, integration support, and long-term care.
Merz argues that the solution lies primarily in adjusting spending, not just increasing transfers. He believes that the federal government and states cannot fully offset rising costs with higher subsidies. Thomas Will, district administrator of Groß-Gerau, has called for an overhaul of social welfare funding, warning that the resulting budgetary strain can only be offset by raising local taxes. He argues that the principle of 'who orders must pay' must be reinstated, as federal and state governments often delegate responsibilities without ensuring sustainable local financing.
The soaring costs of social transfer payments, school support services, and long-term care are placing a significant financial burden on local governments. Chancellor Merz promises support for municipalities while emphasizing the need for careful financial management, acknowledging the substantial financial burden but insisting on more careful expenditure without questioning the welfare state's capacity.
