Siegen's 2026 Budget: Deficits, Loans, and the Search for Financial Stability

2026 Budget Plan: A Deficit of 29.1 Mio. € and Rising Debt

The city of Siegen has entered a phase of financial uncertainty. The 2026 budget plan, presented in several district committees, reveals a deficit of 29.1 million euros after deducting the global cost reduction. This figure is part of a broader trend that has developed over several years: the city plans further deficits totaling 56.8 million euros for the years 2027–2029.

The financial situation is particularly precarious as the city has already taken on more than 200 million euros in cash loans—an increase of 111% compared to 2009. This development shows that the city is increasingly reliant on higher loan acquisitions to finance its ongoing and investment-related tasks.

Structural Deficits and the Need for a Fiscal Stabilization Plan

The city's budget is not only for 2026 but also for the coming years considered "not approvable in the long term." This means that the city is no longer able to sustainably fulfill its financial obligations without a fiscal stabilization plan according to § 76 (1) GO NRW.

Such a plan becomes necessary when the general reserve falls by more than one twentieth in two consecutive years. This has already happened in 2024 and 2025, which is why the city is forced in 2026 to carry forward losses in order to avoid the preparation of such a plan for now. At the same time, the city used the so-called global cost reduction in previous years, which allows up to 2% of regular expenses to be reduced.

Revenues and Expenditures: Where Are the Key Points?

The city of Siegen's revenues are heavily dependent on taxes and fees. The city administration expects tax revenues of 207.86 million euros in 2026, of which the business tax alone accounts for around 100 million euros. Even the key assignments from the state are slightly increasing and amount to 78.1 million euros.

However, expenditures are even higher. The transfer expenditures—i.e., funds passed on to kindergartens, homes, and other external service providers—make up 48.8% of total expenditures and increase by 12.3% compared to 2025. This development reflects the rising childcare costs that the city must pay.

Personnel costs amount to 105.8 million euros and account for 23.1% of total expenditures. They are another key area that could come under pressure in the coming years, especially with rising personnel costs due to collective agreements and salary increases.

Investments: 61.5 Mio. €, but Also Rising Debt

The city plans investments of 61.5 million euros for 2026. The largest projects are focused on school construction, indoor swimming pools, and urban development. Despite these investments, the city is still forced to take on loans of 32.6 million euros. The repayment amount is only 7.1 million euros, which causes the total debt to continue to rise.

The investments are not only financed by own funds but also by grants from special funds. For example, the city receives about 3.7 million euros annually from the special fund "NRW-Infrastructure." Nevertheless, investment financing remains a challenge as the city continues to rely on loan acquisitions.

What Comes Next?

The financial situation in Siegen is anything but stable. Without fundamental budget reforms and a reduction in transfer expenditures, it will be difficult to reduce the deficits in the coming years. The discussion about a "spending commission" is gaining importance, as it could identify possible savings and efficiency gains.

In addition, a long-term fiscal stabilization plan is unavoidable in order to secure the city's financial future. Without such measures, the city will continue to rely on loans and transfer the financial burden to future generations.

Conclusion: A City on the Financial Brink

The financial situation in Siegen reflects that of many cities in Germany: rising costs, declining revenues, and increasing debt. The 2026 budget shows that the city has entered a phase of consolidation—which does not mean that this phase will be painless.

The challenge is to find a balance between investing in the future and ensuring the city's financial security. In the coming months, it will be crucial whether the city is able to implement the necessary reforms—or whether the financial crisis will further intensify.