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Financial crisis in Baden-Württemberg: majority of districts in the red zone!
In July 2025, 31 of 35 districts in Baden-Württemberg will be struggling with financial bottlenecks and impending deficits.
Financial crisis in Baden-Württemberg: majority of districts in the red zone!
In an alarming signal for municipal finances in southwest Germany, 31 out of 35 counties have, according to a report by the South German newspaper written in red numbers. An overwhelming proportion of 89 percent of these districts are unable to cover their current expenses with their own income. This has already led to serious financial constraints in some regions.
The situation is particularly worrying in six districts that have real deficits and no longer have any reserves. Joachim Walter, the president of the district council, described the financial situation as “disastrous” and warned of a “tipping point” at which the existence of municipal structures could be seriously threatened. The increasing expenses for youth and integration assistance as well as for the hospital sector are considered to be the main cause of this development.
Urgent need for action
In order to get out of this crisis, the municipalities are not only demanding more shares of sales tax, but also short-term financial support from the state. Walter appealed to the state and federal governments to ensure local self-government. If no help comes, there is a risk of dramatic cuts in local public transport, which could noticeably affect the quality of life of citizens.
Another challenge is the forecast that there could be an additional deficit of over 110 million euros in the affected districts by the end of the year. According to the annual report of the district council, only 25 of the 35 districts can fall back on reserves, while the remaining six are forced to take on new debt or cut back on investments.
Critical developments in Baden-Württemberg
The financial crisis is not just a problem for the districts. Many municipalities in Baden-Württemberg are also increasingly struggling with deficits. Districts such as the Main-Tauber district, the Rems-Murr district, Calw, Freudenstadt, Rhein-Neckar district and Lörrach are particularly affected. This comes from reports from the daily news out.
A crisis meeting with the state government has already been scheduled for next Friday to discuss strategies for overcoming the financial challenges. The distribution of the federal government's special fund for investments, which provides around one billion euros annually for Baden-Württemberg, is also on the agenda. Walter is calling for the municipal sales tax share to be tripled, which would mean additional revenue of around 2.2 billion euros per year. This is currently around 1.1 billion euros.
The situation is tense and without effective measures there could be an unprecedented decline in many districts. Decision-makers are required to demonstrate a good hand so that the municipal infrastructure remains secure in the future.