Dresden faces a financing gap of around 240 million euros

The city of Dresden is facing a funding shortfall of almost 240 million euros in the coming year. For this reason, the state capital has been ordered to "ensure its financial capacity through suitable measures and to avoid the shortfall", announced the State Directorate of Saxony (LDS). Above all, a budget structure concept must be drawn up for this purpose.

Authority urges thrifty budget management

"In view of the latent budget risks, the State Directorate of Saxony is also urging thrifty budget management for the future. In addition, the state capital of Dresden must clarify the fundamental question of whether the investment program can be continued at the current level and how it is to be financed," it said. The adopted budget statutes have not yet answered this question to the necessary extent.

The state directorate released the 2025/2026 double budget adopted by the city council at the end of March for implementation. Due to financial challenges - including for upcoming infrastructure projects such as the construction of the new Carola Bridge - Dresden's budget was subject to approval for the first time in years, explained LDS President Béla Bélafi. Nevertheless, the budget is still on a solid footing overall.

City of Dresden receives conditions

Commitment appropriations totaling 212.3 million euros were approved for both years, the LDS announced. Due to the critical budget situation, this approval was subject to conditions. Such authorizations allow the administration to enter into payment obligations that only have to be settled in future years.

The Dresden budget this year and next year has a volume of around 2.4 and 2.5 billion euros respectively. Expenditure of 255 million euros (2025) and 360 million euros (2026) is planned for investments. The focus remains on building schools. In the coming years, the city intends to invest more in road construction and civil engineering.

According to the state directorate, the financing of investment projects has been secured in recent years through existing reserves. "These reserves have now largely been used up." This is one of the reasons why Dresden is planning to take out investment loans in the medium term to finance certain measures and has adjusted the previously applicable debt ban accordingly. In 2006, Dresden became debt-free in one fell swoop with the sale of its entire housing stock.