Administration presents draft for double budget for 2025 and 2026 and announces budget freezes
Lüneburg, September 28, 2024 – Deep red years are coming to Lüneburg. Less politically, here the town hall is currently still biased towards green, but fiscally. With a loss of 36.4 million euros for the 2025 financial year and a loss of even 42.5 million euros for 2026, the city is slipping deeper and deeper into the debt trap. This is evident from the draft now presented for the double budget for 2025 and 2026, the first ever for Lüneburg. The administration wants to respond with a budget freeze.
Lüneburg is swimming in money, actually. At 368.3 million euros, revenue in 2025 will be higher than ever before. The administration is also assuming a similarly high amount for 2026. But there is not enough money either way, at least not when it comes to the expenses that the administration believes are pending: 416 million euros in 2025 and 422 million euros in 2026. The result: deep red budgets that are likely to have long-term consequences for the city.
The city is facing “enormous challenges” financially, according to the town hall. Among other things, “state tasks that have been transferred and not fully financed” are listed here, including the admission of refugees, even if the administration does not explicitly mention this. However, it is not stated how high this amount is and what amounts are still outstanding from the country that is allocating the refugees.
But the city can also decide for itself to what extent it wants to spend money beyond the tasks imposed on it – on investments and schools, on streets and cycle paths, as well as on the promotion of clubs and projects or on the permanently deficit Lüneburg Theater as so-called voluntary services.
◼︎ There is a risk of over-indebtedness
The extent of the Lüneburg budget disaster becomes obvious in the development of its liquidity loans or cash loans. This refers to loans that municipalities take out to ensure their solvency. If the maximum amount for cash loans this year is still 145 million euros, it is expected to rise to 220 million euros in 2025 and to 295 million euros in 2026, i.e. more than double.
The problem: If the loans can no longer be serviced from the current budget – this is the case if the budget is in deficit – additional loans have to be taken out. Mayor Claudia Kalisch (Greens) sums it up when she says of the draft that has now been presented: “We pay debts with debts.”
“In order to avoid excessive indebtedness, administration and politics must now find a way out of the negative spiral together and discuss what is actually feasible,” warns Lüneburg’s city treasurer Matthias Rink. He is optimistic that this can also succeed. However, there were no suggestions from the town hall in which areas the administration should make savings.
◼︎ Household locks as an emergency brake
However, the administration does not remain completely idle. Because even a budget approved by the council is subject to the green light from Hanover. The state has asked the city to make corrections several times in the past. As a precautionary measure, the town hall announced budget freezes for both years of the double budget: for 2025 with a volume of 6.5 million euros, for the following year 9.2 million euros. These are so-called disposal restrictions, which prohibit the use of commitment authorizations that have already been granted in a budget and stipulate that expenditure planned in the budget may not be made.
But why a double household now? Kalisch says: “We need a breather to tackle the challenges: to question structures and put all items to the test in order to push forward the necessary restructuring of our finances.” She also presented a motto for the double household: “Doing what is possible in difficult times”. The city is planning investments in the following areas over the next two years:
Streets, bus stops and cycle paths
- 2025: 22.34 million euros
- 2026: 16.56 million euros
Schools
- 2025: 13.49 million euros
- 2026: 16.92 million euros
Internal administration, security and order
- 2025: 5.94 million euros
- 2026: 2.7 million euros
Culture and sport
- 2025: 1.55 million euros
- 2026: 3.97 million euros.
In the coming weeks, the draft for the double budget will be discussed in the political committees and parliamentary groups. The budget for 2025 and 2026 is to be adopted at the last council meeting of the year on December 19th.
◼︎ Key data of the budget drafts
Budget 2025
- Ordinary income: 368.3 million euros
- Expenses: 416 million euros
- Annual result: – 47.7 million euros
- Extraordinary annual result: – 36.4 million euros through extraordinary income of 4.78 million euros and a budget freeze of 6.5 million euros
- Investments: 56.1 million euros
- Total loan requirement: 34.7 million euros
- Maximum amount of liquidity loans: 220 million euros
Budget 2026
- Ordinary income: 369 million euros
- Expenses: 422 million euros
- Annual result: – 53 million euros
- Extraordinary annual result: – 42.6 million euros through extraordinary income of 1.16 million euros and a budget freeze of 9.2 million euros
- Investments: 51.4 million euros
- Total loan requirement: 36.9 million euros
- Maximum amount of liquidity loans: 295 million euros
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