Overview
- Bavarian municipalities report deficits of €2.3bn in 2023, €5.3bn in 2024, and a further €4.6bn shortfall in the first half of 2025.
- Ahead of the November tax estimate, Minister‑President Markus Söder says he no longer rules out new state borrowing to ease local distress.
- Final talks on the 2026 municipal financial equalization in Bavaria are set for the last week of October.
- Municipal associations urge that a large share of Bavaria’s €15.7bn federal infrastructure special fund be passed through to local budgets, preferably via simple lump‑sum allocations.
- Saxony confirms a €4.8bn package for 2026–2037 with about €2.8bn directed to municipalities, only roughly 36% freely disposable, and 10% reserved as a state‑led 'Ministerpräsidenten' pot, drawing criticism over priorities such as an Olympic bid versus rail.