The German Association of Cities and Municipalities (DStGB) has released a legal opinion asserting that municipalities possess constitutionally guaranteed rights to adequate and financially sustainable support and are increasingly overburdened by federal and state mandates. The opinion, authored by former Federal Constitutional Court judge and former Saarland Minister President Peter Müller (CDU), arrives as municipalities across Germany face a deepening crisis of financial strain and eroding self-governance.
The DStGB contends that a “protection against overburgeoning” is failing, with municipalities shouldering an estimated 70% of tasks while receiving only approximately 15% of the nation’s revenue. This stark imbalance has been exacerbated by a more than doubling of social welfare expenditures over the past two decades, now reaching roughly €80 billion annually.
Ralph Spiegler, President of the DStGB, emphasized that Länder (states) bear a responsibility to ensure municipalities have the financial resources necessary to fulfill their mandated duties. He argued that local self-governance cannot be merely a conduit for executing policies dictated by higher levels of government. “The entity responsible for municipal self-governance must be more than simply an executive body of another state level. We currently don’t see the Länder fulfilling the obligation to provide municipalities a sphere of discretion and influence” Spiegler stated.
André Berghegger, Managing Director of the DStGB, has accused the Länder of circumventing financial compensation mandates (“Konnexität”) through creative but ultimately detrimental strategies. He posits that this failure to provide adequate financial support is leading to an unacceptable restriction on the fundamental right to communal self-governance.
The legal opinion’s author, Peter Müller, has proposed a radical solution: a direct funding channel from the federal government to municipalities, bypassing the states entirely. “We must explore alternative funding models to enable cities and municipalities to fulfill their constitutional responsibilities” Müller observed, highlighting the growing frustration with the current system.
The DStGB’s intervention signals a significant escalation in the long-simmering dispute between municipalities, states and the federal government. The calls for fundamental reform of municipal financing raise crucial questions about the balance of power within Germany’s federal structure and the ability of local communities to effectively deliver essential services within a rapidly evolving socio-economic landscape. The future of local governance may well hinge on the responsiveness of Berlin and the Länder to these increasingly urgent demands.