Landrat Calls for Shift in Funding of Social Costs - German municipalities demand urgent reform as social welfare costs spiral out of control
Chancellor Friedrich Merz and Finance Minister Lars Klingbeil have received an urgent appeal from local officials regarding the escalating financial strain on municipalities. District administrator Thomas Will of Groß-Gerau County, echoing the concerns of mayors across Germany, has called for a reform of social welfare funding in an open letter.
The primary issue driving budgetary imbalances in county finances is the surging cost of social transfer payments. In Groß-Gerau County alone, these payments increased by over €28 million between 2023 and 2024, while fiscal equalization grants fell by €2.6 million in the same period. This trend is not isolated; it's a nationwide concern, as highlighted by the mayors of all 13 state capitals in their letter to Merz.
Merz acknowledged these pressures, citing rising costs in youth welfare, integration support, social assistance for long-term care, and advance maintenance payments. He pledged support for municipalities but argued that the solution lies primarily in adjusting spending, not just increasing transfers. Merz stated that the federal government and the states cannot fully offset rising costs with higher subsidies.
Thomas Will warns that the resulting budgetary strain can only be offset by raising local taxes, ultimately placing a heavier burden on residents through higher property tax rates. The appeals from local officials underscore the urgent need for a comprehensive review and reform of social welfare funding to ease the financial burden on municipalities.
