Bavarian counties call for stronger federal funding as fiscal equalization falls short

On 2 December 2025 the Finance Committee of the Bavarian County Association met to examine the 2026 municipal fiscal equalisation (FAG). The committee highlighted that the FAG provides an additional €845 million for counties, strengthens high‑rise construction and hospital projects through special federal funds, and offers short‑term relief. However, members warned that the long‑term financing of rising social standards, especially costs arising from the Federal Participation Act, remains a major challenge.

Simultaneously, the Swabian district association of county executives warned that expanding legal duties in child and youth care, disability assistance and elder‑care, together with limited resources for schools, transport and public safety, are increasingly straining budgets. While they welcomed the new “Konnexitätsprinzip” – “who orders, pays” – they said it does not fully offset the burden and urged comprehensive structural reforms and clearer federal financing to sustain municipal services.