Heidelberg is in a serious crisis. Under Green Party leadership, the city council has relied on expensive climate projects for years and declared a climate emergency. Millions have been poured into consultations, funding programs, and prestigious measures. Instead of saving money, the city is now considering additional levies such as the City Tax. Today, Heidelberg is financially on the sidelines. The supervisory authority in Karlsruhe has imposed a strict credit freeze. Only mandatory tasks may be paid for, while investments are paused. This makes the budget emergency officially a reality. (rnz: 10.09.25)
Credit freeze jeopardizes key projects
Although the Karlsruhe Regional Council approved the 2025/26 budget, new investment loans are blocked. The €164 million freeze, plus follow-up commitments of €54 million, is particularly hard hitting. Schools, bridges, and all-day care facilities are directly affected by the credit freeze. In addition, the supervisory authority is demanding savings of €30 million this year and at least €40 million in 2026.
Without consolidation, the budget emergency will persist. The city must manage its operations with social and personnel costs without new loans. A hiring freeze is already in place in the administration. Clubs and social institutions are also coming under pressure because subsidies are being frozen or cut.
Symbolic politics led from climate emergency to deficit
As recently as 2019, Heidelberg declared a climate emergency and promised climate neutrality by 2030. Millions were invested in consulting, funding programs, and prestige projects. Among other things, a digital cooling map was created that indicates shady spots and fountains. A heat action plan also cost money, without the city being plagued by extreme heat.
The climate emergency turned out to be a financial trap. Instead of building up reserves, dependence on new loans grew. The regional council now sees itself as obligated to drastically cut spending. Heidelberg must therefore urgently prove that it can do more than just symbolic politics.
City Tax as a Lifeline
Despite empty coffers, the city is looking less for savings and more for revenue streams. The city tax will go into effect on October 1, 2025. Guests pay €3.50 per night, for a maximum of five nights. Children up to 16 years of age are exempt, but business travelers are not. Hotels, guesthouses, and Airbnb hosts will also collect the tax.
Day tourists will also be expected to contribute in the future. Officially, the city tax is said to distribute infrastructure costs more fairly. With 1.8 million overnight stays per year, Heidelberg hopes for significant revenue. At the same time, the council is considering a higher trade tax, but this could scare off businesses.
Budget emergency divides city and supervisory authority
The Rhein-Neckar-Zeitung newspaper ran a provocative headline, “Heidelberg is no longer creditworthy.” City Hall immediately objected. They emphasized that banks, not the regional government, decide on creditworthiness. In fact, however, the credit freeze will remain in place until structural improvements are visible.
The Main and Finance Committee will discuss concrete measures on September 24. Karlsruhe expects initial results at the end of December. Finance Mayor Wolfgang Polivka emphasized that there should be “no taboo topics.” The budget emergency is thus forcing cuts that also affect culture, sports, and social services.
Conclusion: Heidelberg faces painful decisions
Heidelberg is providing a lesson in how costly projects without sound financial management can lead to disaster. The credit freeze has taken the city’s breathing space away. The climate emergency, once celebrated as a showcase project, is partly to blame for the deficit. Now the city tax is intended to help plug the gaps.
Whether that’s enough remains questionable. Without a genuine austerity program, Heidelberg will remain trapped in a budget emergency. The coming months will determine whether the change of course will be successful.