Concerns Grow Among Brandenburg Municipalities Over Budget Cuts

The Cabinet of Brandenburg has approved the draft for a dual-year budget covering 2025 and 2026, prompting municipalities to express serious concerns about potential financial strain. Local authorities warn that the budget could exacerbate their already challenging fiscal situations.

The Geschäftsführer of the Association of Towns and Municipalities, Jens Graf, highlighted the precarious financial climate faced by many municipalities, indicating that towns are preparing for both spending cuts and increases in local taxes. According to Graf, the proposed state budget could lead to additional financial burdens for municipalities, which are already grappling with a financial crisis.

An initial assessment indicates that the municipalities will face a shortfall exceeding 350 million euros, equating to roughly 140 euros per resident. This necessitates further budgetary adjustments within local governments, Graf noted.

On a positive note, the budget proposal maintains the municipalities' share of state tax revenues at 22.4 percent, and it aims to secure state contributions to federal and EU programs. However, the overall allocations for municipalities are set to decline due to slower-than-anticipated growth in tax revenues.

As part of the budget plan, municipalities are expected to make concessions regarding housing benefit savings and family benefit contributions. The final decision on the budget will rest with the state parliament.

The Association of Towns and Municipalities is advocating for amendments to the budget proposal, emphasizing the need for a substantial portion of any future federal special funds to be earmarked for municipal infrastructure investments.