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German and Austrian Cities Confront 2026 Budget Gaps After Funding Shift

Lower transfers alongside rising mandatory levies are driving deficits, loans and postponements.

Overview

  • Updated municipal funding calculations and higher county and school levies cut key allocations, worsening 2026 results even where 2024–2025 business tax receipts were strong.
  • Bebra pulled December budget debates after its projected gap jumped from €1.9 million to €5.3 million, a swing tied to a late‑2024 business tax spike that inflated its assessed capacity, with a vote now targeted for February.
  • Eiterfeld presented a non‑approvable draft showing a deficit above €5.3 million, raised property and business tax rates for 2026, and warned debt could surge without deeper cuts as parties prepare further talks in January.
  • Councils elsewhere flagged deep shortfalls and fresh borrowing: Bassum passed a 2026 plan with about €2.5 million in red ink, Sulingen’s draft shows roughly €3.06 million, and Buch approved a €1.5 million loan after planned revenues fell through.
  • Despite tighter operations, investment programs proceed on credit: Germering eyes loan‑financed projects into 2029, Bregenz plans €22.1 million of 2026 investments with debt near €170.7 million and higher local fees, and Innsbruck balanced cash flows after late trims as opposition seeks details on a proposed housing sale.