Budget freeze 2026: City of Jena defines concrete measures

The city of Jena is implementing a budget freeze of 21.5 million euros for the 2026 financial year. In doing so, the city administration is concretizing the budget freeze for the coming year that was announced in November. The background to this is the continued significant fall in trade tax revenue and the sharp rise in social spending, which is putting pressure on the financial situation of municipalities across Germany.

According to current estimates, the annual deficit for 2026 will deteriorate by around 18 million euros compared to previous planning. Trade tax alone is once again expected to fall by around 20 million euros compared to the previous budget. Although the expected state allocations will increase in 2026, they will not be able to compensate for the expected additional expenditure with a simultaneous reduction in tax revenue.

Mayor and Head of Finance Benjamin Koppe explains: "With the budget freeze and the measures set out in it, we are reacting early to the ongoing tense budget situation. Our aim is to critically examine expenditure, limit financial risks, postpone investments that can be postponed and secure the city's ability to act. Legally prescribed services and central services for the people of Jena will be retained."

What exactly is being blocked?

The budget freeze is spread across several levels:

1. savings in the core administration

Budgets will be blocked in all five departments, totaling around 2.5 million euros. The main areas affected are

• General administrative expenses (e.g. office and consumables, business trips, training),
• postponed or reduced projects, expert opinions and individual investments,
• adjustments to selected funding.

Examples include the postponement of individual investments in the area of urban development, savings in grant budgets and the postponement of individual events or projects. Within the departments, the blocked amounts can be reallocated flexibly between budgets as required.

2. personnel costs

An additional 1.5 million euros will be saved in personnel costs. However, these savings are to be generated within the existing personnel cost budgets. The amount of EUR 100,000 for performance bonuses will also be completely eliminated in 2026.

3. own and public enterprises

The municipal companies also make a significant contribution to budget stabilization. A total of around 17.3 million euros will be saved here, primarily through

• Optimizations in the current business plans (e.g. personnel and material costs),
• the postponement of major investment projects, including the Sportforum, the 2nd construction phase of the skin clinic, the expansion of Winzerlaer Straße and IT investments,
• Subsidies to the JenaKultur municipal enterprise and the business development company will be reduced.

What does this mean for citizens?

It is important:

• The city'smandatory tasks and ongoing services remain guaranteed.
• There is no complete spending freeze.
• Above all, expenditure that can be postponed or reprioritized will be blocked.

Some projects and investments will be postponed or implemented on a smaller scale than originally planned. The aim is to create financial relief in the short term without jeopardizing key services for the urban community.

What happens next?

Financial developments will continue to be closely monitored. Following the May 2026 tax estimate, the Finance department will prepare an updated forecast by June 30, 2026. On this basis, it will be examined whether adjustments to the budget freeze are necessary.

In addition, the efforts of the city leadership to digitize the administration more strongly and to optimize processes will be tackled more stringently in order to identify potential for another possible round of savings. All organizational units are therefore required to engage in a "task critique" and the associated sorting out and reflection of service components and to present results by September 2026.

Benjamin Koppe concludes by emphasizing: "The current development is not a problem unique to Jena, but an expression of nationwide pressures on local authorities. Declining trade tax revenues and sharply rising social expenditure require clear prioritization and responsible use of our financial leeway. At the same time, we are using all available options to keep the impact on the city as low as possible and to secure the foundations for sustainable budget development."

Background to the budget freeze

A budget freeze in accordance with Section 22 of the Thuringian Municipal Budget Ordinance is an instrument for limiting expenditure in the event of imminent budget deterioration. It serves to stabilize the budget and secure the municipal ability to act.

Overview of the planned blocking amounts for departments and municipal companies

Explanations

[1] Compensated via allocations from climate pact
[2] Compensated via allocations from ÖGD pact
[3] Compensated via allocations from the Nursing Professions Act
[4] The city's subsidy to the JenaKultur municipal enterprise will be reduced by the same amount in 2026