Overview

• Baden-Württemberg municipalities are projected to lose €383 million in 2025 and €467 million in 2026, deepening fiscal challenges.
• Numerous cities and towns face potential budget freezes due to declining revenues and escalating social spending obligations.
• The state government will advance €3 billion from its municipal financial equalization fund earlier than planned to support local budgets.
• While the state budget remains nearly neutral due to prior reserves, upcoming federal tax relief measures could impose triple-digit million euro costs on the state in 2026.
• The federal government faces a €33.3 billion revenue downgrade by 2029, with additional tax relief plans expected to further strain public finances.