Municipalities in dire straits: Lord Mayor warns of financial crisis

Grimma's Lord Mayor Matthias Berger (non-party) sees Saxony's municipalities in a precarious situation. "The budgets are no longer balanced because the costs have exploded. We no longer have the money to be active and innovative. The municipalities are being patronized in every respect," the 56-year-old told the German Press Agency. There is an alienation between the state and the municipal level. Head of government Michael Kretschmer is much more communicative than his predecessor Stanislaw Tillich (both CDU) and a nice person. "But it doesn't help the Free State to have a Minister President who has shaken hands with every Saxon once. He has failed to make structural changes."

This is exactly what the former Saxon Finance Minister Georg Unland (CDU) called for years ago. During a speech at the tax office in Grimma, Unland said that Saxony would go up the tree financially if bureaucracy was not cut back and structures were not changed. "The number of state civil servants was once supposed to fall to 70,000, now we are approaching 100,000. 40 percent of the state budget goes on personnel costs. That is bitter from the perspective of a local politician," emphasized Berger.

Mayor calls for honest stocktaking

Even ten years ago, the Free State was only treading water. Now it is going backwards. This is evident in many areas, such as the healthcare system, internal security and school education. "We need an honest stocktaking to determine what we can still afford," said Berger, who is standing as the leading candidate for the Free Voters in the state elections on September 1. A lot of money is being blown on things that are not really crucial.

"We believe we are doing well. But we have not been doing well for a long time because we are living beyond our means. When I became mayor of Grimma in 2001, the town had trade tax revenues of one million Deutschmarks and a per capita debt of 1,800 Deutschmarks, or around 500,000 and 900 euros respectively. Currently, trade tax brings in 12.5 million euros and the debt is 240 euros." Nevertheless, the money is not enough because new tasks are constantly being added by the federal and state governments.

Berger: Municipalities lack room for maneuver

In Berger's opinion, local self-government has degenerated into an empty phrase because the municipalities now lack any room for maneuver. New ideas are constantly being brought into the country, but their implementation is not working. As a result, many of those in positions of responsibility in the municipalities today are adopting a mentality similar to that of the GDR era - according to the motto: "Just let them up there talk."

"We need an honest stocktaking. We need clear structures and responsibilities," said Berger. Extreme hierarchies like those in Saxony are wrong. The municipalities should be given more responsibility. They should not have to "beg if they want to screw in a light bulb".

Dispute over municipal finances only settled for the time being

A dispute over municipal finances in Saxony was settled at the end of June - at least for the time being. The state and the municipal umbrella organizations agreed on key points for the municipal financial equalization for 2025 and 2026. Among other things, the districts and independent cities are to receive a total of 162.5 million euros each for the next two years, primarily to support social spending. The municipalities belonging to the districts are to receive an investment allowance of 82 million euros from the municipal financial equalization scheme for 2025 and 2026.

The umbrella organizations had previously repeatedly made it clear that without a significant improvement in financial allocations, the high cost increases in cities and municipalities over the next two years would no longer be manageable. CDU district councillor Henry Graichen had put the deficits of the districts at 833 million euros for this period.