City's fiscal standstill in Dresden holds firm, yielding positive outcomes

In a financial interim report presented on Monday, the city of Dresden revealed that it is currently facing high inflation and economic risks in the future. Mayor Dirk Hilbert emphasised the importance of budget discipline for the city, and the necessity of a budget freeze to maintain operational capability for the rest of the current fiscal year.

According to the report, increased social expenses, including costs related to accommodation and catering of refugees, have been noted. These expenses, coupled with stagnant income, have led to a potential year-end deficit of two to three million euros in Dresden's budget, contingent upon the budget freeze.

Mayor Hilbert sees the federal government and the Free State of Saxony as responsible for maintaining the operational capability of the municipal community. He also highlighted that besides himself, the responsibility for the necessary financial stability of the city of Dresden lies with the financial control authorities ("Kommunalaufsicht") and the fiscal equalization system ("Finanzausgleichsrecht"). These institutions must primarily address any financial imbalance of the municipality.

The mayor reported that the budget freeze has been successful in largely balancing the deficit. The significantly increased social expenses can at least be cushioned for the moment, according to the current financial interim report.

Despite these challenges, the city of Dresden continues to invest to remain future-oriented. However, the report emphasizes that there is no sign of sustainable relief on either the income or expenditure side for the city, looking ahead to 2024.

The city of Dresden has collected more taxes than expected in the spring, offering a glimmer of hope. Yet, the mayor underscored that the budget freeze must continue to remain in place for the remainder of the fiscal year to maintain operational capability.

The city of Dresden needs reliable and structurally stable financing to meet future municipal tasks. As such, the mayor called upon the financial control authorities and the fiscal equalization system to address the financial imbalance of the municipality, ensuring the city's ability to continue serving its citizens effectively.