German City Imposes €20 Million Budget Freeze Amid Revenue Shortfall
A major German city is facing a €20 million budget shortfall for 2026, with business tax revenue now expected to reach only €85 million instead of the planned €105 million. To address the gap, the administration has proposed sweeping freezes on spending across personnel, operations, and investments until a new supplementary budget is approved.
An ad hoc commission will now collaborate with officials to draft revised financial plans before the summer recess.
The city administration has outlined a strict budget freeze to close the financial gap. Under the proposal, €13 million in personnel costs will be withheld by leaving vacant posts unfilled and letting fixed-term contracts expire. Another €12 million will come from cutting 15% of departmental budgets, while €1 million will be saved by reducing third-party transfer payments.
A further €7.8 million in investment funds will be blocked for 2026, affecting procurement (€1.9 million), stalled construction projects (€3.1 million), and other infrastructure works (€2 million). The city council may still approve unfinished construction on a case-by-case basis, provided it complies with regional authority rules.
Looking ahead, the freeze will extend into 2027–2029, with an additional €35 million set aside in financial planning. The total proposed freeze includes €26 million from the operating budget and €43 million from investment funds over the four-year period. Despite these cuts, the city has already saved €12.8 million over the past two years through its Modernization and Digitalization Program.
The freeze will remain in place until the council adopts a supplementary budget. A decision is expected before the summer break, following recommendations from the newly formed ad hoc commission.
The measures aim to stabilise finances amid lower-than-expected tax revenue. If approved, the freezes will affect hiring, departmental spending, and infrastructure projects until a revised budget is finalised. The city council retains flexibility to greenlight critical construction work, provided it meets regional guidelines.
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