Financial Situation Remains Tense

At the start of the budget presentation, Treasurer Konrad Beugel provided an overview of developments in the current fiscal year. According to his report, income tax revenue is performing slightly better than planned. A positive trend is also currently emerging with regard to business tax.

Based on the current snapshot, the budgeted figure of 125 million euros will be exceeded, with actual revenue totaling more than 130 million euros. Beugel pointed out, however, that this trend is primarily attributable to one-time effects resulting from back payments for previous tax years.

The city also expects trade tax revenue of 125 million euros for 2027. Beugel described this estimate as optimistic, as it already takes into account previously announced one-time effects. At the same time, he emphasized that the city cannot rely on the trend in trade tax revenue.

The financial situation therefore remains strained. Rising social security and personnel costs, high construction costs, and ongoing budget shortfalls pose significant challenges to the city’s budget.

Operating Expense Budgets Reduced Again

The preparation of the 2027 budget was shaped by government guidelines and the requirements for the preliminary budget review. During discussions with the departments and agencies, the operating expense budgets were reduced once again, Beugel explained. The total subsidy requirement in this area amounts to 69.9 million euros. In 2026, it was still 75.3 million euros.

Beugel also made it clear that further reductions will be necessary.

The Free State’s block grants are calculated at 44.9 million euros in the draft budget. However, announcements regarding the district levy—and in particular the rate of that levy—are causing concern. The draft budget estimates the district levy at 63.3 million euros.

55.7 million euros for investments

Despite the pressure to consolidate, investments totaling 55.7 million euros are planned for 2027.

The largest single item is the continuation of the comprehensive renovation of the vocational school, at 18.3 million euros. Nine million euros are budgeted for road and bridge construction. In addition, two million euros are earmarked for the fire station in Bruck.

With regard to the medium-term financial plan through 2030, Beugel pointed to the continuing high deficits. Despite rising trade tax projections, there will be no surpluses from administrative operations.

An additional 29 million euros in consolidation by 2029

Alongside the draft budget, a comprehensive package of consolidation measures was presented.

To reduce the short-term loans, the government of Middle Franconia, as the city’s supervisory authority, has mandated that in addition to the consolidation measures totaling 68.1 million euros already approved for 2025, to save an additional 29 million euros in ongoing administrative operations by 2029.

To this end, the city administration has presented the City Council with an additional list of options for reducing expenditures and services as well as increasing revenue.

The goal is to achieve an improvement in the operating budget of just under 8.5 million euros for the 2027 fiscal year. In addition, the proposal includes further consolidation options for the subsequent years through 2030.

These include various types of consolidation measures: In addition to savings on operational and personnel costs, the proposal also outlines changes to municipal services as well as additional revenue through adjustments to fees and taxes.

Discussions in the Coming Weeks and Months

The list forms the basis for further budget deliberations. The individual consolidation options are to be addressed during the deliberations in the relevant City Council committees in November.

These discussions will focus on the specific details and evaluation of each option, as well as their financial and technical implications.

Subsequently, the specific measures are to be adopted together with the 2027 budget.

The final decision is scheduled for the City Council meeting on January 21, 2027.

Video featuring Mayor Jörg Volleth: