Landrat Calls for Shift in Funding of Social Costs - German Local Governments Warn of Financial Collapse Over Soaring Social Costs
Thomas Will, the district administrator of Groß-Gerau, has sounded the alarm on the financial strain faced by local governments. In an open letter to Chancellor Friedrich Merz and Finance Minister Lars Klingbeil, Will called for a fundamental overhaul of social welfare funding. He warned that the current situation could only be addressed by raising local taxes, further burdening residents.
Will highlighted soaring costs in school support services and the financial gap in long-term care as key issues. Merz acknowledged these pressures, but Klingbeil rejected compensating for missing revenues at the federal level. Instead, he expressed general concern for municipalities' ability to act. Meanwhile, Merz pledged support for municipalities after receiving an urgent appeal from the mayors of all 13 state capitals.
Will also warned about the erosion of local self-governance, noting that while mandates from federal and state governments continue to expand, funding has stagnated. In Groß-Gerau County alone, social transfer payments surged by over €28 million between 2023 and 2024, while revenue from fiscal equalization grants fell by €2.6 million in the same period. The primary driver of budgetary imbalances in county finances is the surging cost of social transfer payments. Will's appeal echoes the concerns of district administrators nationwide, supporting a previous letter sent by the mayors of Germany’s state capitals. Merz argued that the solution lies primarily in adjusting spending, not just increasing transfers, and that the federal government and states cannot fully offset rising costs with higher subsidies.
Thomas Will's call for a fundamental overhaul of social welfare financing reflects the growing concern among local governments about their financial sustainability. While the federal government acknowledges the pressures, it remains to be seen how the issue will be addressed, with differing views on the role of increased transfers versus spending adjustments.
