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Lower Saxony’s 17-billion-euro debt crisis cripples schools and rural towns

A €4B deficit last year left towns drowning in debt—now schools and rural communities are paying the price. Can Lower Saxony break the cycle?

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1 min read
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This is a black and white collage picture. In these pictures, we can see the roads, poles, buildings, plants, vehicles, flag, street lights and some objects. We can see the text at the bottom of the image.

Rechnungshof: Kommunen slide into 'financial long-term crisis' - Lower Saxony’s 17-billion-euro debt crisis cripples schools and rural towns

Lower Saxony's municipalities are grappling with a severe financial crisis. Total debt has surged past 17 billion euros, with many areas facing chronic staff shortages and demographic shifts. Schools are struggling with crumbling buildings and outdated facilities, while rural areas see declining tax revenues. The investment backlog, particularly in education, is at record highs.

The financial strain is evident in the figures: municipalities recorded a nearly four billion euro deficit last year. This is partly due to rising social welfare expenditures and personnel costs, coupled with stagnant tax revenues. The situation is so dire that an increasing number of municipalities are spiralling into a 'permanent financial crisis'.

The school system is a prime example of the backlog. Around 60 percent of deferred investment projects relate to schools. Crumbling buildings and outdated facilities have become commonplace, affecting daily school life in many areas. Meanwhile, growing cities like Hanover, Oldenburg, Göttingen, and Osnabrück are battling affordable housing scarcity.

The debt and investment backlog in Lower Saxony's local authorities continue to rise. While no specific reform initiative has been announced, the dire state of municipal finances and school infrastructure calls for urgent action. The chronic staff shortages and demographic shifts only exacerbate the situation, making it crucial for local authorities to find sustainable solutions.

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