When a community’s expenditures for the current year exceed its income, necessitating debt, it is required to adopt what is known as a non-approvable budget. This is precisely what occurred today in the Ingolstadt City Council. A massive gap has opened in the 2026 municipal budget, leaving a deficit of about 66 million euros.
Ingolstadt Requires Approval for Loans
Despite the deficit, the city council had to formally approve this budget on Wednesday to remain eligible for targeted subsidies and state financial support in the future. The city needs these funds to implement planned projects; from the municipal theater and sports clubs to schools and kindergartens, the list of municipal responsibilities is vast.
However, to secure the necessary loans to cover the gap, the municipality must now obtain the consent of the Government of Upper Bavaria.
Debate Over Property and Trade Tax Increases
Prior to the vote, Lord Mayor Michael Kern (CSU) and Finance Director Franz Fleckinger addressed the financial situation, followed by representatives from the various political factions. There was a general consensus that the non-approvable budget must be passed to secure subsidies and allow for collaborative efforts to improve the city’s standing. Only the Free Voters (Freie Wähler) faction opposed the document, citing insufficient revenue and excessive spending in the medium to long term.
Possible austerity measures and tax hikes were also discussed. A majority of the factions favored increasing the property tax (Grundsteuer), while simultaneously opposing an increase in the trade tax (Gewerbesteuer) to ensure Ingolstadt remains an attractive location for businesses.
Automotive Industry Crisis Drives Down Tax Revenue
The city’s financial troubles began to surface two years ago. In the fall of 2023, then-Lord Mayor Christian Scharpf (SPD) unexpectedly introduced a budget spending moratorium. The cause was a massive drop in trade tax receipts, primarily triggered by the crisis in the automotive industry. Since 2023, the situation has only worsened. For 2026, trade tax revenue is projected at just 77 million euros. In prosperous times, this figure stood at approximately 200 million euros. No significant improvement is currently anticipated.Source: Ingolstadt City Council
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