Alarm mood in Mecklenburg-Western Pomerania: municipalities are struggling with a deficit worth billions!

Alarm mood in Mecklenburg-Western Pomerania: municipalities are struggling with a deficit worth billions!

In Mecklenburg-Western Pomerania, cash-strapped coffers are overshadowing the municipal financial landscape. As NDR reports, the municipalities are recording a severe deficit of millions, which is increasingly becoming a central challenge. Low tax revenues, the results of the last census and rising costs have led to an alarming trend: after eight years of surpluses, local budgets went into deficit for the first time in 2023, with the deficit rising to an astonishing 280 million euros in 2024.

Thomas Beyer, chairman of the Association of Cities and Municipalities, is sounding the alarm and urgently calling for talks with the state government. The current financial situation is described as precarious. It seems as if money is tight, which means that numerous construction projects have to be put on hold and local authorities are starting to cut back on voluntary benefits.

Rising costs and falling allocations

The reasons for this worrying financial situation are manifold. Rising personnel expenses and higher social benefits put additional strain on the coffers, while income falls. The recent census also revealed significantly lower population numbers, which has resulted in lower funding allocations. Key allocations from the state are expected to fall by a third - from 1,019 euros per inhabitant in 2024 to just 756 euros in 2025.

To shed some light on this, consider the average allocation per citizen in Germany to be 520 euros. In the Lüchow-Dannenberg district, the municipalities even receive the highest allocation of 916 euros per capita. These funds are crucial for the general financing of administrative budget expenditure, while municipal revenues come mainly from local fees and taxes.

Rights and lawsuits of communities

Some municipalities have already taken legal action against the reduced grants due to the census. This is a multi-stage process in which municipalities have to adjust their finances. The ongoing costs for the free daycare centers, which have cost parents nothing since 2020, amount to around one billion euros annually for the state and local authorities.

Grevesmühlen's mayor Lars Prahler is also calling for a reduction in bureaucracy and is in favor of introducing a fee of 50 euros per daycare or after-school place. These measures could help to get the rising costs under control, but the debate about the financial framework is far from over.

The “investment booster” that has been promised is also causing discussion, as it is feared that it could create new tax holes. The municipalities are therefore faced with a difficult task: the balancing act between necessary investments and compliance with a strained budget.

The dramatic financial situation in Mecklenburg-Western Pomerania shows once again how important balanced budget management is for municipalities. This makes it clear that “there is something going on” for the future of the region, and the state government is now required to be creative in order to turn things around.