Leipzig's Budget in Crisis Due to Unfunded Mandatory Tasks
Leipzig's finance mayor, Torsten Bonew, has revealed that the city's budget is slipping out of control due to unfunded tasks transferred from federal and state governments. The city council's Left faction has raised concerns about the impact of these tasks on Leipzig's finances, as municipalities struggle to manage the increasing costs without adequate funding.
The city of Leipzig is grappling with a growing shortfall in its budget due to mandatory tasks that are not fully funded. A recent review identified a shortfall of 167 million euros for five items, including costs of accommodation and care. The actual amount Leipzig doesn't receive for fulfilling its mandatory tasks is much higher and has grown steadily over the years.
The finance department provided two thick PDF packages to shed light on the issue, but they lack clarity, making it difficult to gain a complete overview. Creating such an overview would require a major research project, as municipalities know what they have to pay but not what they actually receive in return for fulfilling their tasks. The situation is so dire that the city's budget could be pushed into the red with the 2025/2026 double budget due to these unfunded tasks.
The financial strain on Leipzig, and indeed many German cities, is intensifying due to the transfer of tasks from federal and state governments. With the overall municipal deficit reaching a historic peak of around 24.8 billion euros in 2024 and worsening in 2025, there are fears of insolvencies around 2025/2026. The city of Leipzig and its finance mayor are working to manage this challenge, but the lack of clarity and adequate funding for these mandatory tasks presents a significant hurdle.
