District levy lawful: Court stops relief for communities!

District levy lawful: Court stops relief for communities!

The recent decision of the Higher Administrative Court has brought some clarity to the jungle of municipal financing. On October 15, 2025, the court found that the district in which the district expenses are determined had perfectly complied with the legal requirements when setting the levy rate of 42.1 percent. The MDR reports this and emphasizes that the procedure for determining and disclosing the financial data as well as the calculation of the levy were carried out correctly. This means that the municipalities will not receive any relief from the 2023 district levy this year either and will have to prepare for the full contributions that the district can keep to finance its tasks.

What is particularly noteworthy is that the district data used was classified as current and reliable. The court described the points system for assessing the financial situation of the municipalities as “appropriate” and “not arbitrary”. This finally clarified that the district acted completely legally when collecting the levy. As the MDR further explains, no further legal remedies are possible against this decision.

A look at the municipal levies

The basis for the municipal levies is Section 4 of the LFAG. Districts, municipalities and district associations levy various levies, including the district surcharge, in order to close the gap in coverage to balance the budget if financial resources are insufficient. These levies are calculated in percentages and the determination of the assessment rates is at the discretion of the respective corporation, which is made clear in Section 2 of kommunalbrevier.de.

It should be particularly emphasized that the levy rates must be set in the budget statutes. These must be the same for all municipalities subject to levy, but may vary for different levy bases. It should also be noted that the highest levy rate may not exceed the lowest by more than a third. This gives the communities a certain amount of leeway, but also clear boundaries that must be adhered to.

In addition to the regular district levy, special levy rates can be levied if certain tasks benefit the localities differently. These must also be shown in the budget statutes to ensure transparency.

In conclusion, it can be said that the district has overcome the financing challenges through clever handling of the levies and, thanks to the recent court decision, is now on solid legal ground. The responsibility still remains with the local authorities, who have to keep a close eye on their finances.