Dortmund is imposing a new budget freeze effective October 1, 2026, following a massive increase in the deficit over the course of the year. While a shortfall of €54 million was initially projected, the gap stood at approximately €228.5 million by the end of August. Internal cost-cutting measures have since brought the current forecast down to around €206 million. The primary causes are weaker trade tax revenues, rising personnel costs, and other budgetary risks. Consequently, an additional €30 million in savings is to be achieved by the end of the year to avert a formal budget recovery plan.
Image: Shutterstock
Budget freeze aims to save an additional 30 million euros
The freeze is in effect from October 1st until the end of the year. However, legally mandated, already committed, and unavoidable expenditures remain permissible. In contrast, new discretionary projects may be postponed or cancelled. Funding will continue for current salaries and construction projects that have already been formally approved.
Lower trade tax revenues are placing a particularly heavy strain on the budget. Furthermore, the city’s personnel costs have risen significantly over the years. According to WDR, the number of full-time positions grew from around 8,200 in 2015 to approximately 11,100 in 2025—an increase of about 35 percent. Consequently, the budget freeze affects a budget where ongoing expenditures have already risen substantially.
Dortmund faces a spending freeze for the second time in 2026
Dortmund had already restricted spending in January. Although the city lifted this initial budgetary freeze in March, it maintained additional cost-saving targets. Even then, the municipal finance department warned of lower trade tax revenues. Furthermore, the emergency medical services sector posed a budgetary risk of up to 34 million euros.
However, the problems did not go away. The financial statements for 2025 show a deficit of 352.7 million euros. Dortmund was able to offset this shortfall using reserves. At the same time, trade tax revenues were lower than anticipated. Consequently, the city’s financial buffer is shrinking faster than originally planned.
Formal budget recovery measures would further restrict financial freedom
The critical factor now is the statutory limit on the use of general reserves. According to calculations in current reports, this limit is reached at a deficit of approximately 201 million euros for Dortmund. The current forecast of around 206 million euros already exceeds this threshold. Therefore, the city is attempting to improve the financial outcome through further cost-cutting measures before the end of the year.
Formal budget recovery proceedings would have significantly more severe consequences than the current spending freeze. Dortmund would be required to submit a binding financial recovery plan to the Arnsberg district government. Discretionary services and new projects would become even more dependent on the city’s budgetary situation. Thus, the additional savings target of around 30 million euros is primarily aimed at avoiding this step in 2026.
Municipal deficits are becoming a chronic problem in North Rhine-Westphalia
However, Dortmund is not alone in this situation. A recent survey by the Association of Cities and Municipalities of North Rhine-Westphalia (Städtetag NRW and Städte- und Gemeindebund) covers all 396 municipalities in the state. Only seven cities and municipalities are projected to have a structurally balanced budget by 2026. At the same time, 89 municipalities are already subject to mandatory budget consolidation measures. Around 300 municipalities are posting losses or are forced to deplete their reserves.
According to the associations, municipal deficits in North Rhine-Westphalia total approximately nine billion euros. Dortmund, however, clearly illustrates how quickly financial projections can shift: an initially projected deficit of 54 million euros ballooned at one point to a shortfall of nearly 229 million euros. Consequently, the savings measures currently being planned will determine the extent of the city’s financial flexibility in 2027.
Author: Blackout News
Sources: Stadt Dortmund verhängt Haushaltssperre für das vierte Quartal – Dortmund geht das Geld aus – Dortmund dreht Geldhahn zu: Was die Haushaltssperre für Bürger bedeutet