Hagen in Financial Crisis Mode: How the City is Managing Debt, Taxes, and Competitive Imbalances

The Financial Crisis in Focus: Hagen Between Debt Reduction and Tax Competitive Imbalances

The city of Hagen once again faced the challenge in February 2026 of ensuring its financial stability. The municipality is under pressure to reduce both its debt burden and tax deficits while simultaneously addressing economic imbalances in the transport and tax sectors. At the same time, new fee models and investment plans are being discussed to stabilize the city's financial foundation in the long term.

Financial Stabilization Plan and Debt Relief

Hagen is required under § 76 GO NRW to implement a financial stabilization plan. The current debt level stands at 1,004,393,372 €, with the state's share of the old debt relief amounting to 543 million euros, effective until 27.01.2026. This step results in an annual interest savings of approximately 9.5 million euros in 2026 and reduces the financial burden on the city.

Despite this relief, the interest burden for the assumed loans remains with Hagen until that point. The minimum debt relief rate is 41.055 %, meaning the city receives 340.27 million euros in debt relief payments. The repayment of obligations for liquidity security is scheduled for no later than 31.12.2026.

Tax Deficits and Business Tax Revenues

Business tax revenues are a central pillar of Hagen's financial planning. The tax target for 2026 is 92 million euros, with preliminary revenues in 2025 at 127.2 million euros. This shows that the city largely met its revenue targets in the previous year. A deficit is expected for 2026, although it may be significantly lower than anticipated.

The district government of Arnsberg holds the final decision on the budget. The goal is to achieve a balanced budget within an "manageable timeframe." The draft budget ordinance is expected to be adopted in May 2026 and subsequently approved by the district government.

The Dog Tax: Revenue Source and Political Point of Contention

The dog tax remains an important revenue source, although the number of dogs is declining. In 2025, 9,624 dogs were registered, a decrease of 548 compared to 2021. Tax revenues amounted to 1.730 million euros, slightly below the previous year's 1.793 million euros.

The tax tariff is high (180 € for one dog, 210 € for two dogs, 240 € for three or more dogs) and among the highest in NRW. The HAK faction has requested a new assessment of the dog population to more accurately evaluate the revenue situation.

Competitive Imbalance Between Taxis and Uber

Another intriguing aspect is the competitive imbalance between taxi companies and Uber. Taxis are subject to strict legal obligations, such as the obligation to provide transport, tariff obligations, and the obligation to return to the base location. Uber car rentals are largely exempt from these requirements, leading to a tax disadvantage for Hagen's taxis.

The HAK faction is calling for an examination of fair competition conditions, including the introduction of minimum price regulations. The AfD faction submitted a written inquiry regarding the disadvantages faced by Hagen's taxi companies (Inquiry Number: 1018/2025-1).

Outlook: Budget Planning and Investment Programs

The 2026/2027 budget planning is still in progress. The draft plan is expected to be presented on 26.02.2026, and the budget ordinance will be adopted in May 2026. The district government is expected to approve it in late summer 2026.

Another topic is investment planning. The city plans to purchase a truck and trailer for an access control system. The investment amount is just under 52,700 €, with depreciation and follow-up costs to be considered.

Conclusion: Hagen in Financial Crisis Mode

The city of Hagen is facing a complex financial challenge. Although the old debt relief from the state of North Rhine-Westphalia provides some relief, the budget situation remains tense. Business tax revenues are crucial for stabilizing the budget, and tax policy remains a politically contentious issue. At the same time, Hagen must also address economic competitive imbalances. The path to a balanced budget will be planned in the long term and will depend on approval from the district government. In the coming months, it will therefore be interesting to see how the city of Hagen shapes its financial future.