New working group established to develop proposals for municipal finance reform

Even though the figures for 2025 are not yet complete, it is becoming apparent that municipal core budgets in Germany will show a financing deficit of around €30 billion – the highest figure since the Federal Republic was founded. Yet, despite the worsening budget situation, politicians have so far failed to implement any fundamental reforms. A systematic reorganization of the distribution of tasks and revenues between the federal government, the states, and the municipalities is still pending.

Against the backdrop of this development, the Academy for Spatial Development in the Leibniz Association (ARL) has established an interdisciplinary and transdisciplinary working group to develop proposals for a fundamental reform of the municipal task, expenditure, and revenue system. The working group officially commenced its work with its constituent meeting on 27 February 2026.

Prof. Dr. Ivo Bischoff from the University of Kassel and Prof. Dr. Thomas Döring from Darmstadt University of Applied Sciences will chair the working group. Besides Christian Bergholz and Dominik Frankenberg from the Thuenen Institute of Rural Economics, the committee comprises a total of 13 experts from academia and practice, including representatives from the fields of finance, administrative science, political science, spatial planning, and municipal practice.

The homepage of the ARL working group “Reform of Local Government Finances” can be found here.

Contact: Dr. Christian Bergholz