Hamburg Reports Slight Surplus for 2025, But Faces Growing Financial Challenges
Hamburg, September 1st – Hamburg’s Finance Senator Andreas Dressel (SPD) presented the city’s 2025 business report on Tuesday, revealing a modest surplus of 47 million euros. While the city saw increased tax revenues compared to the previous year, these gains are insufficient to offset rapidly rising expenditures, particularly in social welfare and public sector wages. This marks a significant decrease from the previous year’s surplus, which exceeded one billion euros.
Social Welfare and Wages Strain the Budget
The city’s core budget, encompassing Hamburg’s authorities and administration, is heavily impacted by higher social welfare benefits and increased wages for municipal employees. Personnel costs rose by 458 million euros compared to 2024, while transfer payments, including social welfare, saw an increase of 475 million euros. “This is a major concern for city-states, and thus for Hamburg,” stated Dressel, emphasizing the need for the federal government to address the social welfare reform.
Municipal Companies Report Losses
In contrast to the core budget, Hamburg’s municipal companies, such as Hochbahn, SAGA, and Energiewerke, reported a combined loss of 142 million euros. This deficit is attributed to increased energy costs and higher interest rates.
Thilo Kleibauer, CDU’s budget spokesperson, criticized the growing debt of municipal companies. He noted a significant increase in group debt from 43.9 billion to 46.7 billion euros. “This development is alarming, especially given the significantly increased interest rates,” Kleibauer remarked. He also highlighted the substantial growth in the number of employees at municipal companies, now nearing 157,000, a ten percent increase over the past four years. “This massive expansion of municipal activities by the SPD and Greens, without any critical review of tasks, must finally be effectively limited,” he added.
Significant Austerity Measures Planned for Upcoming Budgets
Due to the worsening financial situation, the Hamburg Senate plans to reduce the budget by 400 million euros annually in the coming years. In June, Dressel outlined key savings measures in the draft budget for 2027 and 2028:
- Working Hours for Civil Servants: From January 1, 2027, civil servants are expected to work one hour longer, totaling 41 hours per week. The remaining day off for reduced working hours will also be abolished.
- Social Ticket Price Increase: The discounted social ticket for benefit recipients will increase by ten euros, costing 37.50 euros per month. Future price increases for the Deutschlandticket are not yet included.
- Student Ticket Fee: The previously free student ticket, based on the Deutschlandticket, will no longer be entirely free. A digital service fee of 19 euros per year will be introduced from 2027 to “reduce misuse and minimize administrative costs for HVV and the school authorities.”
- University Semester Fee Increase: The semester fee for university students, including the semester ticket and contribution to the student union, will rise from 384 to 414 euros.
- Elbphilharmonie Plaza Entry Fee: From October 5, adults will pay five euros per person to visit the Elbphilharmonie Plaza, with a reduced admission of three euros for the viewing platform.
- Kita Fees: Kindergarten fees for care beyond the free five hours per day will be dynamically adjusted annually. The maximum contribution, applicable to family incomes of 6,000 euros net and above, will increase from the current 191 euros to 320 euros by August 1, 2027, and to 336 euros by August 1, 2028.
- Police Staffing: The number of operational police officers will increase, but only to the extent that personnel in administration and other employee sectors are reduced. The city also plans to forgo its own police helicopter in the future by investing in drone technology.
- Rainwater Discharge Fee: Those discharging rainwater into water bodies will be subject to a water maintenance fee, dependent on the connected sealed area. The exact fee amount is yet to be determined.
The draft budget will now be submitted to the Hamburg Parliament (Bürgerschaft) and is expected to be finally approved in December after several rounds of committee consultations.
Investments in U-Bahn Network Expansion Continue
Despite the tightening financial situation, the city continues to invest in infrastructure, with over two billion euros allocated last year, primarily for the new U4 and U5 subway lines. Investments also include electricity grids and municipal housing construction. “Even under difficult financial conditions, we are sticking to our future investments. At the same time, we must sustainably stabilize our public finances,” Dressel affirmed.
Source: NDR
