In view of the alarming figures regarding the nationwide deficits of municipal core budgets after the first three quarters of 2024 of around 25 billion euros, which is double the figure for the previous year, the Association of Cities and Towns of Lower Saxony is calling for a reorganization of financial relations between the federal government, state and municipalities as well as a comprehensive reform of the debt brake with a binding preferential rule for municipal investments.

The President and Vice President of the Association of Cities and Towns of Lower Saxony, Lord Mayor Jürgen Krogmann (City of Oldenburg) and Lord Mayor Frank Klingebiel (City of Salzgitter), are therefore calling for a Federalism Reform III with the following priorities

• Ban on the transfer of tasks: The federal government should not transfer any further tasks to the municipal level.
• Strict adherence to the principle of connectivity
• readjustment of the financial relationship between the federal government, federal states and local authorities and
• a reform of the debt brake:

"It is imperative to readjust the financial relationship between the federal government, federal states and municipalities. The federal and state governments must permanently strengthen municipal finances structurally. If the municipalities are responsible for around 25 percent of the tasks of the state as a whole, but only receive around 14 percent of the state's tax revenue, this cannot work in the long term. We need an increase in the municipal share of joint taxes and, in Lower Saxony, an increase in the combined ratio in the municipal financial equalization system."

"At the same time, the federal and state governments must finally stop transferring more and more new tasks to the municipalities or adding to existing ones without adequately funding them," explains Mayor Frank Klingebiel (City of Salzgitter), Vice President of the Association of Cities and Towns of Lower Saxony. "Renouncing new tasks, rules and standards as well as a comprehensive municipal finance reform with the aim of enabling local authorities to finance their existing, predominantly state-run tasks is the order of the day."

"The European leeway for the debt brake must be used and the funds distributed in such a way that all levels, including the federal states and municipalities, benefit from it," Krogmann and Klingebiel conclude: "It is unacceptable that the municipal level continues to run up debts while the federal and state governments boast of complying with the debt brake!"