Greens urge reform of financial equalization with municipalities

Saxon municipalities are up to their necks in water due to gaps in their financial resources. Calls for a reform of the municipal financial equalization system are therefore growing louder. The Budget and Finance Committee of the Saxon State Parliament has now heard experts on the draft of the Financial Equalization Act (FAG). The Greens called on the government to react appropriately.

"It became clear once again: the need for reform in the municipal financial equalization system identified by the experts is great - and yet the state government is still refusing to make any real progress," said Green parliamentary group leader Franziska Schubert. The municipal umbrella organizations had refused to approve the current draft: "That is clear."

Schubert recalled that the municipal core and extra budgets had a deficit of 680 million euros in the 4th quarter of 2024. She referred to rising social spending, among other things. "The situation in the rural districts is particularly dramatic. Even when voluntary services are completely dispensed with - as is currently the case in the district of Görlitz - it is not possible to balance the budgets."

Greens accuse CDU of blocking reform

Even in this massive imbalance, the CDU continues to refuse any discussion "about possible borrowing, which the federal government has made possible for the federal states, and at the same time claims to have a 'municipal heart'", said Schubert. In view of the massive underfunding of the municipalities, this is "highly implausible". The CDU has been blocking a genuine FAG reform for years.

CDU politician Ronny Wähner called for an honest discussion about what is achievable. "A financial equalization can only distribute what was previously generated. This is what we as the CDU parliamentary group stand for - solid, fair and responsible," said the MP. The feedback from the hearing would be incorporated into further parliamentary deliberations on the state budget.

CDU: Free State will not leave its municipalities alone

According to the draft bill, the Free State will provide the municipalities with around 4.3 billion euros this year and around 4.1 billion euros next year. The state also wants to contribute an additional 160 million euros per year to the financing of municipal social expenditure.

According to the CDU, the financial relief comes at a time when the leeway at state level is also tight. "The Free State is not leaving its municipalities to fend for themselves - even if the budget situation in the state itself leaves little room for maneuver," it said.