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Hesse Audit Report Finds Four in Five Municipalities in Deficit, Puts Mergers on the Table

Rising costs paired with stagnant revenues are widening local funding gaps despite new federal money.

Overview

  • The Landesrechnungshof’s Kommunalbericht 2025 says roughly 80% of Hessian municipalities posted financing deficits in 2024 and deems voluntary municipal mergers likely unavoidable in the medium term.
  • The collective financing deficit expanded to 2.6 billion euros in 2024 from 597 million euros in 2023, and no county recorded a surplus.
  • Short‑term liquidity loans, reduced to 70 million euros in 2023, jumped to 401 million euros in 2024 as total municipal debt reached about 60.2 billion euros, including 16.7 billion in core budgets and 43.5 billion off balance sheet.
  • The audit authority judges the pledged 4.7 billion‑euro federal infrastructure fund as only a short‑term palliative that could increase future recurring costs.
  • Auditors urge intensified inter‑municipal cooperation and task reviews, report serious civil‑protection gaps at schools, and note the Löhnberg financial case remains unresolved pending prosecutorial investigations.