Pirmasens fights for financial justice: lawsuit against Rhineland-Palatinate!

Pirmasens fights for financial justice: lawsuit against Rhineland-Palatinate!

There is a lot of movement in the budget area of ​​the city of Pirmasens. The city council has decided to take legal action and is again suing the state of Rhineland-Palatinate. This decision was made unanimously on June 30 and specifically aims to take action against the key allocation decisions for 2024 and 2025. Pirmasens is in financial distress, with a budget deficit of around 20 million euros for 2025. In addition, those responsible have to cope with liquidity loans of 17 million euros and old debts of around 60 million euros. Mayor Markus Zwick is concerned about the situation and highlights the high unfunded social spending of over 34 million euros for the coming year. These circumstances make it clear: Pirmasens urgently needs solutions.

Pirmasens had already successfully brought down the state financial equalization before the Rhineland-Palatinate Constitutional Court. The lawsuit is filed with the Neustadt/Weinstrasse Administrative Court and is intended to bring about a constitutional review of the municipal financial resources. Zwick emphasizes that the state's financial equalization system is unconstitutional. There were indications of this not only in the current problem, but also in previous court rulings. The Constitutional Court of Rhineland-Palatinate has ruled several times in the past that the State Financial Equalization Act (LFAG) in its former form did not comply with the constitutional requirements. In a judgment dated February 14, 2012, he determined that parts of the LFAG for the years 2007 to 2013 were to be assessed as unconstitutional. The legislature was then obliged to adopt a constitutional regulation by January 1, 2014.

The challenge of municipal financial equalization

The challenges in municipal financial equalization do not only affect Pirmasens alone. In 2025, all twelve independent cities in Rhineland-Palatinate will be under financial pressure, which will make the situation even worse. The Rhineland-Palatinate Association of Cities supports Pirmasens' lawsuit, but cannot sue itself. Michael Mätzig, managing director of the Association of Cities, emphasizes the urgency of the approach. The districts of Südwestpfalz and Cochem-Zell have also announced that they will file lawsuits against their decisions. The need for fair and constitutional funding for cities cannot be overlooked in this context.

Allocations for municipalities and municipal associations in Rhineland-Palatinate are made as part of the municipal financial equalization in accordance with the specifications of the LFAG. This financial equalization fund is fed from certain tax revenues from the state. But as it turns out, the current distribution of allocations often does not reflect cities' real financial needs. In the past, the Constitutional Court has declared the regulations on the financial equalization assets and financial allocations to be incompatible with the state constitution and has given clear instructions on the new regulations. The legislature is required to take into account the financial pressures of the municipalities in order to provide the affected cities such as Pirmasens with appropriate financial resources.

In the end, it remains to be hoped that the legal steps and the discussion about financial resources will actually lead to an improvement. Pirmasens has courageously taken the first step, and now the future of the state financial equalization is becoming an issue for the courts and politicians.