Abso-fucking-lutely. IMO this is the main factor why most government IT in Germany is in such a disastrous state. Not just abysmal pay, but also coupled with:
a) Limited-term contracts (usually 2 years)
b) Ludicrous academic requirements: You only get pay grade E13 (which is ~40k€/year) with a Diplom or a Master's Degree, so there's no way to hire motivated talent that the rest of the market is more likely to ignore
c) In the case of Limux, Munich has one of the highest costs of living in all of Germany. You earn the same amount of money for a position, no matter if you live in Munich or somewhere in the middle of nowhere with half the cost of living.
d) Since this year there's now also a requirement that a candidate must not have worked under a limited-term contract for the government before. You can imagine how that works out, when most government jobs of the last decade were mostly limited-term.