Brandenburg Municipalities to Receive More Money and Planning Security Through 2029

A central component is the so-called Verbundquote (municipal share ratio), which regulates how much money the federal state passes on from its tax revenues to the cities and municipalities. This ratio will remain at 22.43 percent from 2027 to 2029. The amount distributed through the Verbundquote will rise continuously to over three billion euros by 2029, as was stated. The financial equalization is the central source of income for cities and municipalities.

Finance Minister Daniel Keller (SPD) spoke of significant support from the state for the municipalities – despite the existing pressure to save in the run-up to budget deliberations. He pointed out that the investment-related key allocations, which are earmarked, for example, for infrastructure, will be increased to seven percent. They will thus rise by almost 200 million euros in 2027, said Finance Minister Keller.

Higher Allocations and New Funds

In addition, a new investment fund will be set up, which is to grow to just under 500 million euros by 2029 and enable low-interest loans. For this purpose, 157.6 million euros annually will be deducted from the allocations to the municipalities. The annual loan volume is to be at least 160 million euros.

In the area of rescue services, the agreement provides for concrete assistance: The rural districts and independent cities will each receive 40 million euros in 2027 and 2028 to support rescue service tasks. The background is a dispute that has been ongoing for months between municipalities and health insurance funds over the financing of ambulance deployments.

Aid for Rescue Services

SPD parliamentary group leader Björn Lüttmann expressed relief about this arrangement: „Ich hoffe, damit sind auch die Überlegungen mancher Landkreise, Patientinnen und Patienten Rechnungen für sogenannte Leerfahrten zu stellen, vom Tisch". This is intended to ensure that the population's supply of rescue services is maintained.

An increase is also planned for the cultural sector: To preserve the theaters and orchestras, the allocation from the financial equalization will be raised by eight million euros to 30 million euros starting in 2027. This is intended to support the important cultural infrastructure in the state.

Culture, Digitalization, and Further Reforms

Interior and Municipal Minister Jan Redmann (CDU) emphasized the opportunities of digitalization for the municipalities: „Für mich bietet vor allem die Digitalisierung beste Chancen, damit die Kommunen Personal einsparen und Ressourcen effizienter einsetzen können". This is intended to make administration more modern and cost-effective.

The municipal umbrella associations assessed the result cautiously. „Es sei ein Kompromiss erreicht worden", the umbrella associations judged. Essential demands had been pushed through, but there were also points that still needed to be clarified in further negotiations. However, work is to be done on a reform of the financial equalization in the future.

The agreement now has to be passed by the state government and the state parliament before it can enter into force. Against the backdrop of empty coffers in the cities, the compromise is considered an important step to secure the municipalities' capacity to act in the coming years.