Hamburg Senate Enters Difficult Budget Consultations
Hamburg, June 22 – The Hamburg Senate is scheduled to convene this Monday at the Rathaus’s Kaisersaal to outline the budget plan for the next two years. This year’s consultations are markedly different from previous years: while a record-breaking double budget for 2027/2028 will be presented to the public two days later, the prevailing sentiment is that of a savings budget, signaling an end to the years of plenty.
The current budget for 2025/2026 stood at approximately 44 billion euros, nearly 18 percent higher than the previous double budget.
Challenging Economic Situation Affects Hamburg
“This year’s budget consultations are taking place against the backdrop of a difficult overall economic situation in Germany, which is also impacting Hamburg,” stated Finance Senator Andreas Dressel (SPD) to the German Press Agency.
A month prior, Dressel announced the May tax estimates for the Hanseatic city. While Hamburg can still expect rising revenues, these are projected to be significantly lower than anticipated just six months ago. By 2030, the newly expected shortfalls in revenue are estimated to total 1.4 billion euros.
“The declining tax trend reduces our expenditure leeway,” the Finance Senator explained. For the next year, he expects 290 million euros less than previously assumed, and for 2028, a shortfall of 293 million euros. This year’s tax revenues are estimated at nearly 16.6 billion euros; according to the May estimate, they are expected to rise to approximately 18.5 billion euros by 2030.
Rising Social Costs Tighten Financial Leeway
Furthermore, according to Dressel, the federal government has significantly impacted the states’ finances. “The federal government’s tax changes in recent years also mean painful revenue shortfalls for the Hamburg budget – around 1.5 billion euros per year.” Concurrently, rising social expenditures and other statutory benefits with legal entitlements are narrowing the financial scope, “without the federal government having yet succeeded in effectively curbing costs,” the Senator lamented.
“Additionally, we must finance the current collective bargaining agreements for public service and the jurisprudence on appropriate remuneration for civil servants and pensioners.” The 5.8 percent agreement for public sector employees, negotiated by Dressel himself as the lead negotiator for the states, will cost Hamburg, including its transfer to civil servants, more than 1.6 billion euros by 2028.
“All of this means that we have to expect significantly less financial leeway for the 2027/28 budget,” the SPD politician stated clearly: “We will not be able to absorb many cost increases in ongoing expenditures.” This implies that all departments must save wherever possible on ongoing expenses.
Consolidation Planned, Investments to Continue Rising
“Consistently consolidate and powerfully invest” is the motto Dressel has set for the budget consultations. He promised that the next budget would again be a growth budget on the investment side, “with a strong impetus for future investments.”
Since 2018, investments have been ramped up, which “has manifested in a threefold increase in per capita investments.” The city intends to continue on this path in the upcoming double budget and further increase investments. In the current budget plan, investments were estimated at six billion euros.
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+++ Editorial note: This report was created based on material from the German Press Agency (dpa). For comments or inquiries, please contact [email protected]. +++
