Municipality in distress: District Administrator Stolz raises the alarm about the financial crisis in the MKK!

Municipality in distress: District Administrator Stolz raises the alarm about the financial crisis in the MKK!

Recently, Thorsten Stolz, the district administrator of the Main-Kinzig district, took a clear stance on the tense budget situation of the municipalities. In response to the ongoing discussion about local finances in Hesse, which was also triggered by a press release from the CDU Main-Kinzig, Stolz described the situation as a “serious crisis” in local finances. The numbers are alarming: in 2022, the Hessian districts recorded a total deficit of 386 million euros, and forecasts indicate an even more dramatic development in the current year. Advance Online reports that Stolz complains that the problem of municipal finances is not sufficiently recognized by the public, while municipalities and districts continue to struggle with a strict debt brake.

Stolz also calls for a clear positioning of those politically responsible at the state and federal level in order to address the precarious situation. A key concern is the insufficient financial resources for childcare, where expansion had to be carried out without appropriate support. For example, a subsidy requirement of 10.5 million euros is estimated for Erlensee, 22 million euros for Maintal and 6.3 million euros for Waechtersbach in 2025. Costs are also rising rapidly in the social areas: the need for subsidies in the youth welfare office is expected to grow from 50.5 million euros in 2022 to 77 million euros next year. My paper adds that the financial situation is being made even worse by the increasing expenditure on social benefits.

Overview of the deficits

Overall, the situation in the municipalities in Hesse is tense. According to that Hessian State Statistical Office A total financing deficit of 688.1 million euros was recorded in 2023. This represents the first deficit since 2015. Over 50% of municipalities have a deficit, with the median financing balance falling to -164,000 euros. The Main-Kinzig district is particularly affected, recording a deficit of 55.6 million euros - that corresponds to 129 euros per capita.

The environment is characterized by high spending on social assistance, which is reinforced by a sharp increase in personnel expenses. These financial difficulties meant that over 20 million euros had to be saved in the financial planning of the Main-Kinzig district through job closures and cuts. Necessary investments in education and infrastructure are planned for 2025 - a total of around 200 million euros - while at the same time an adjustment of the district levy by 1.8 points could be necessary to compensate for a deficit of 13.2 million euros. My paper states that without the previous austerity measures an increase of at least 5.0 points would have been necessary.

Stolz emphasizes the need for an increase in municipal financial equalization by at least 750 million euros from 2026. The Hessian District Council also supports this demand, which is aimed at compliance with the principle of connectivity, which is intended to regulate the financial burdens of municipalities in relation to new tasks. It remains to be seen how quick political solutions can be found to address these challenges. Because time is of the essence and the well-being of the communities is at stake.