Nuremberg breathes a sigh of relief: financial relief and new investments are coming!

Nuremberg breathes a sigh of relief: financial relief and new investments are coming!

The financial difficulties of many Bavarian cities are a topic that has had a strong impact on discussions in recent months. Nuremberg in particular highlights the alarming situation of municipal finances and is not alone in this. The financial situation in the Free State has noticeably worsened, which the city of Nuremberg also noticed. The result of the talks between the Free State and the municipalities is now available and brings with it some relief. This is reported by, among others, nürnberg.de.

For the coming year, the district levy in Nuremberg will increase by around 30 million euros, a development that is not exactly reassuring given the around 50 million euros in taxes already to be paid to the Middle Franconia district this year. However, thanks to aid from the Free State, the additional burden was reduced to a mid-single-digit million amount.

Nationwide challenges to the municipal financial situation

But the problems are not limited to Nuremberg. Across Bavaria, municipal debt is growing faster than in the rest of Germany. Expenditure by cities, districts and municipalities increased by 9.2 percent, while income only increased by 5 percent. According to br.de, the per capita debt in Bavaria is currently 1,564 euros, which last year led to a deficit per inhabitant of 396 euros - compared to the national average of 321 euros.

The nationwide municipal financing deficit, which amounts to 24.8 billion euros, is no less dramatic. This represents the biggest loss since reunification. What is particularly alarming is that 90 to 95 percent of expenditure is tied to compulsory tasks, and the investment backlog in school buildings is high: around 31 percent of the total backlog is accounted for by these. Further investments are urgently needed to secure the municipalities’ infrastructure.

The future of municipal finances

The Bavarian state government plans to increase subsidies for Nuremberg's infrastructure. 25 million euros have already been earmarked for the expansion of the Franconian Expressway in 2027. Over a period until 2029, the city will receive 17.4 million euros annually to strengthen its investment power. These funds are to be invested primarily in schools and bridges, an important step to sustainably improve the city's infrastructure and increase the quality of life of its citizens.

The city leadership in Nuremberg sees the new agreements as an important signal that can provide short-term relief. Nevertheless, the challenge remains to draw up a balanced budget for 2026. In the long term, ongoing dialogue with the Free State is necessary in order to achieve stable city finances. This also confirms the assessment of experts that targeted and unbureaucratic distribution of funds is important in order to effectively address the problems of municipal finances. The President of the German Association of Cities, Burkhard Jung, says that these funds must be distributed quickly to the municipalities.

Overall, there is still a lot to be done: the municipalities' structural financial problems are long-term and require comprehensive solutions. In addition, the high investment rate of municipalities, sometimes up to 23.1 percent, which is burdened by social spending, is constantly being questioned. The question remains as to how the Bavarian city coffers can be freed up in the coming years to ensure a sustainable and future-proof infrastructure.