They run clinics, pay social benefits and support culture: However, the budget situation in many Bavarian districts is tense. There are no taxes that go directly to the districts, nor do they collect any shares of taxes. They are largely financed through levy payments that the districts and independent cities transfer. They also receive money from the federal and state governments.
“We can clearly see that the gap between income and expenditure is widening at all local levels. If economic development continues at such a slow pace, the situation will become even worse in the coming years in view of the constantly rising costs in the social sector,” said the Head of the Bavarian District Council, Franz Löffler. “Since over 90 percent of our expenses go back to mandatory statutory tasks, there is little potential for savings. Without a fundamental change, our levy payers will have to adjust to rising levy rates in the coming years.” But in the end this affects all budgets at the local level because the money is missing elsewhere.
The district council has therefore been calling for greater financial participation from the Free State and “especially from the federal government, which, as the legislature, is responsible for the vast majority of social benefits,” Löffler continued. How much cities and districts have to pay to the district is based on a calculation by the State Office for Statistics – it calculates the levy power based on tax revenue and key allocations for each municipality separately.
At the beginning of the year, the districts determine in their budget resolutions the financial requirements that must be covered from the district levy. Last year, according to the district council, this was around 4.7 billion euros. This corresponded to three quarters of the districts’ total income. The city of Munich, for example, paid more than 829 million euros in district levy in 2023. According to the city treasury, a similar amount is planned in the budget for 2024. The city of Bamberg, with its around 80,000 residents, transferred more than 21.7 million euros to the district in 2023.
In the Upper Franconia district, the assessment rate for the district levy is now expected to increase. The reason: The expenditure on social services that the district has to provide in terms of integration assistance and care assistance will also increase in 2024, as a spokesman announced. The number of people who are dependent on help from the districts due to age, disability or mental illness will continue to increase in the coming years, District Council President Henry Schramm emphasized in December.
Rising costs in many areas are putting a strain on district budgets
The District Council of the Upper Palatinate also decided on a slight increase in the levy. According to the information, a loan of three million euros is also planned – for the first time in two decades. The Upper Bavaria district passed a budget of 2.63 billion euros in December. District council president Thomas Schwarzenberger said that only with “tremendous efforts” was it possible to keep the district levy stable despite significantly increasing expenses. To do this, the district is dipping into its reserves. Rising collective agreements, price increases, continued high energy costs, the shortage of skilled workers and the increasing number of people who receive integration assistance and care assistance are putting a noticeable strain on the budget, it was also said.
The assessment rate for the levy also remains the same in Middle Franconia, where a budget with a volume of 1.1 billion euros was recently passed. The largest share of expenditure is earmarked for social security.
There are no changes to the levy assessment rate in the Lower Bavaria district either. The districts of Swabia and Lower Franconia will reduce the assessment rate for the district levy. Swabia intends to attack reserves instead. The district of Lower Franconia describes its situation positively: the assessment rate for the levy could fall because the levy capacity of the districts and independent cities has increased by 5.2 percent compared to the previous year and at the same time the overall result of the district budget in 2023 is expected to be better than initially calculated, the district said.
In Bavaria, districts primarily operate clinics with a psychiatric and neurological focus, but also many other social institutions. They also support people in need of care who cannot finance their outpatient or inpatient care themselves, and people with disabilities to enable them to participate in society. The districts also support or operate many cultural and educational institutions.