Budget situation in Dresden remains "extremely tense"

The state capital Dresden is almost 45 million euros short this year. This is according to the 2024 interim financial report, as announced by the city on Wednesday. "The budget situation of the state capital of Dresden remains extremely tight in the second half of 2024," the report states.

For the first time in years, the state capital must therefore expect a deficit at the end of the year. The reasons given are cost increases due to inflation and dramatically increased expenditure in the social and asylum sector, which are not sufficiently financed by the federal government or the Free State of Saxony. Added to this are high personnel costs due to the latest collective wage agreement in the public sector.

Although the report states that revenue from taxes, allocations and fees, among other things, will increase by almost 200 million euros compared to previous assumptions, this will be offset by increased expenditure of around 264 million euros. Taking into account the liquidity generated in the previous year, an uncovered deficit of almost 45 million euros is to be expected.

No relief in sight

According to the statement, no relief can be expected in the short term: Looking at the draft budget for 2025/2026 and the medium-term financial planning up to 2029, it is already becoming apparent that social expenses will continue to rise massively, while funds from key allocations will decrease significantly.

Mayor Dirk Hilbert therefore called for a course correction in the city's financial policy. "On the one hand, the key allocations from the Free State are plummeting, and on the other hand, the statutory mandatory benefits, particularly in the social sector, are exploding," he said in the constituent meeting of the city council last week. A continuation of the status quo will not be possible.