Spending by cities and municipalities increased significantly last year. Their households are becoming more and more in trouble.
The deficit in the budgets of German cities and municipalities rose to 17.3 billion euros in the first half of 2024. That was ten billion euros more than in the same period last year, as the Federal Statistical Office announced on Tuesday in Wiesbaden, citing preliminary results. Accordingly, expenditure in the so-called core budgets of municipalities grew significantly faster than income, particularly due to sharply rising costs for social benefits.
Overall, according to statisticians, expenditure rose by 10.8 percent compared to the first half of last year, while income grew far less strongly at 5.1 percent. Accordingly, the deficit arose exclusively in the core budgets. At 17.3 billion euros, the deficit there was more than twice as high as in the first half of 2023. The extra households, on the other hand, closed with a minimal increase.
According to the Federal Office, the drivers of spending in the municipal core budgets were massive increases in social spending. Cities and municipalities had to spend 41.5 billion euros on this in the first half of the year – 12.5 percent or 4.6 billion euros more than in the same period last year. The main reason was the increase in the standard rates for social assistance and citizens' benefit on January 1st. Expenditure on other social benefits also increased significantly.
In addition, according to official statistics, municipalities had to pay more for staff. The costs in this area increased by 9.1 percent to 40.5 billion euros compared to the first half of 2023 and 2024.
However, according to the Federal Statistical Office, overall comparability was partially limited. Due to the introduction of the Germany ticket, which is subsidized by the federal government, in local and regional public transport, the approximately 370 municipal transport companies nationwide were classified as extra households from the second quarter of 2023. This also influences household management.
