2027/2028 Budget Planning: The City of Jena Faces Further Consolidation Decisions

At the Finance Committee meeting on September 29, 2026, the City of Jena provided an update on the current status of the preparation of the 2027/2028 biennial budget. Although the internal planning discussions held to date have already improved the financial situation compared to the initial budget requests from July 2026, Nevertheless, a financial deficit of €210 million remains, spread over the medium-term planning horizon of five years through 2031. To present a budget that can be approved and avoid the need for a budgetary stabilization plan, further significant consolidation is therefore necessary.

“The municipal financial crisis we are seeing throughout Germany has now reached Jena as well. Over the past few months, we have worked intensively on budget planning together with the specialized departments as well as the city-owned and city-operated enterprises, and have already achieved significant improvements. At the same time, we must state clearly: What we have achieved so far is not yet enough. We face difficult decisions and will have to examine very carefully how we allocate our limited resources,” says Mayor and Finance Commissioner Benjamin Koppe.

Starting point significantly more challenging than in the previous budget planning cycle

In the summer, “Planning Stage 8” initially brought together the resource requests from the specialized departments, current personnel costs, the business plans of the city-owned and municipally operated enterprises, and the available tax and revenue forecasts. This stage of planning made the scale of the challenge clear. Compared to the previous medium-term plan, the projected results for the years 2027 through 2031 deteriorated by a total of approximately 186 million euros, and the financial plan by approximately 248 million euros.

Several factors have contributed to this: increased personnel and social security expenses, higher rent and operating costs, increased subsidy requirements, changes in capital expenditures, and a sharp decline in tax revenues (primarily from business tax).

Compounding the problem is the fact that financial reserves from previous years are now significantly lower. As recently as 2024, nearly 30 million euros more in retained earnings and more than 57 million euros in additional liquidity were available for the budget planning for the 2025–2026 biennial budget.

Joint Efforts: Initial Consolidation of Administrative, Directly Managed, and Municipally Owned Operations Yields First Improvements

Over the summer, the budget estimates were reviewed and corrected in collaboration with budget managers from the administration and municipal enterprises, and initial consolidation measures were incorporated. As a result, the planning has already shown visible improvement: In the income statement, the improvement compared to the initial budget request for the period from 2027 to 2031 amounts to approximately 112 million euros. In the financial plan, the figure is about 93 million euros.

In addition to specific consolidation measures implemented by the administration, updated planning assumptions have also contributed to this improvement. These include, in particular, higher expected formula grants from the state as well as initial changes to the plans of the KITT municipal agency and the municipal enterprises.

“Everyone recognizes the seriousness of the situation, and I am very grateful that we in the administration, as well as in the city-owned and municipal enterprises, are pulling together and have embarked on a joint process to develop further consolidation measures. The results so far show that the intensive work in these areas has already begun to bear fruit—but the efforts are currently not yet sufficient to avoid a budget stabilization plan for the city of Jena,” says Treasurer and Head of the Finance Department Jennifer Michall.

Further Prioritization Necessary

In the coming weeks, the administration will therefore examine further consolidation options. Both the expenditure and revenue sides will be considered.

The focus will be on the following questions:

Which tasks are required by law or contract, and which services are voluntary?
Which expenses can be adjusted, and where can additional revenue be generated?
Which investments and projects take priority given their strategic importance and urgency?
Where can processes and structures within the administration and municipal enterprises be made more efficient in the short and long term?

This is explicitly not just about short-term savings. The goal is to secure the city’s financial capacity to act even beyond the 2027–2028 biennial budget.

“We must make decisions now that are both financially viable and professionally sound. This also means speaking honestly and openly about which services we will be able to provide in Jena in the future—in what quality and to what extent—and which investments are feasible at what point in time,” said Koppe.

Draft budget to be presented in December

In the coming weeks, the existing consolidation proposals will be further reviewed, refined, and incorporated into the budget planning.

The goal is to develop a consolidated draft budget from the mayor and submit it to the City Council for its first reading on December 16, 2026. The decision on the 2027–2028 biennial budget is scheduled for the City Council meeting on January 27, 2027. The original schedule had to be postponed by one month due to the significantly more challenging financial situation.

“Our goal remains a budget that can be approved,” emphasizes Benjamin Koppe. “The path to achieving this will require us to make difficult decisions. It is important that we make these decisions transparently, in a way that is understandable, and with a clear vision for the future of our city.”

Key figures at a glance

Consolidation requirement according to the budget proposal submitted before summer (2027–2031): €284 million in the operating plan & €305 million in the financial plan
Current consolidation requirement (2027–2031): €172 million in the operating plan & €212 million in the financial plan.
This results in—and necessitates—annual cash-flow-impacting consolidations of 42 million euros.
Differences from the previous plan: a worse starting position (retained earnings of -€30 million, liquidity of -€57 million) and higher annual deficits (€23–32 million in the income statement, €16–28 million in the financial plan)