While investments are set to decline in comparison to previous years, the city nevertheless plans to take on new debt in the billions. The financial situation remains strained, even though tax revenues are holding steady. The city continues to pursue its course of fiscal consolidation while simultaneously emphasizing the necessity of targeted investments in essential areas of public service.
Fewer Investments Than in Previous Years, but Billions in New Debt: Munich’s Draft Budget for 2026
Despite the need for austerity and shrinking financial margins, the municipal treasury office is projecting a surplus of approximately 197 million euros from its ongoing administrative operations in 2026. This amount is sufficient to meet the city’s scheduled debt repayment obligation of 191 million euros. According to the city, this is an important step toward obtaining formal budget approval from the Government of Upper Bavaria.
Investments for the year 2026 are estimated at more than 2.7 billion euros—representing a decline compared to the previous peak in 2019. Nevertheless, the planned expenditures significantly exceed the financial resources currently available. As a result, the city intends to take on new debt. This means that the city’s total debt is expected to rise to more than nine billion euros.
Priorities Include Education, Housing Construction, Childcare, and Public Transport Despite Budget Pressures
Despite financial constraints, the city still aims to make investments in important areas for the future: school and childcare center construction, support for public transport, and housing development are all to continue in the coming years. However, it is emphasized that not all the measures proposed by the specialized departments can be implemented. The city will have to assess which projects are necessary and financially viable.
Even though business tax revenues remain stable and are expected to reach approximately four billion euros in 2026, the treasury office sees no room for additional expenditures. Global economic trends and inflation are making budget planning more difficult.
Political Reactions to the Budget Framework Decision: Agreement, Criticism, and Diverging Priorities
Mayor Dieter Reiter (SPD) spoke of difficult conditions facing municipalities:
“This budget framework, as submitted by the treasury office, does not exactly give rise to jubilation, but it clearly shows the kind of pressure cities and municipalities are currently under. Still, within these parameters, the 2026 budget would still be approvable. That is something many cities and municipalities unfortunately can no longer claim these days.”
Voices from the Green-Red coalition also support a structured savings course. Sebastian Weisenburger, chairman of the parliamentary group consisting of The Greens/Rosa Liste/Volt, stated:
“We are tackling the issues at hand. We are reducing current expenditures, but not using a blanket approach. Rather, we must now examine what we really need and in what form. If we adjust many of the right levers, we can significantly and permanently reduce our costs.”
In contrast, the CSU/Freie Wähler (Free Voters) parliamentary group expressed criticism. During the full council meeting, its financial policy spokesperson Hans Hammer clearly opposed the current fiscal policy of the city government:
“Munich does not have a revenue problem—the business tax revenues are actually projected to rise to around four billion euros this year. The problem lies in the expenditures within the current budget. Even after the savings that have already been made, only a surplus of six million euros remains. That is negligible.”
He accused the Green-Red city hall coalition of setting the wrong priorities and managing the budget in an unsustainable manner. As a result, the CSU/FW group finds the budget framework decision unacceptable and has rejected it.
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