Gotha facing financial crisis: record budget and high district levy looming!

Gotha facing financial crisis: record budget and high district levy looming!

The Gotha district is entering the last quarter of 2025 with a record budget of almost 272 million euros, and debates about finances are already in full swing. District Administrator Onno Eckert presented the draft budget to the district council and made it clear that the ever-increasing expenses, especially in the social area and for personnel, represent a serious burden. This increase in expenditure of 155 million euros must be offset by corresponding income.

Unfortunately, the prospects for financial support from the country are rather bleak. According to the state government's new budget plans, hardly any increases in allocations for the districts are to be expected, which makes the situation even worse. There are also cuts in local state financial equalization, particularly in the area of ​​key allocations for social spending. This is causing unrest among the municipalities, because the lack of clarity about possible compensation from the state government or through a debt package from the federal government hangs like the sword of Damocles over further financial planning.

Increasing district levy as a challenge

The district has no choice but to take drastic measures. An increase in the district levy of almost seven million euros is planned, which corresponds to an increase of 2.46 percentage points. Compared to the national average, this is considered “humane”. However, Mayor Knut Kreuch of Gotha expressed incomprehension about the impact of this increase, especially in view of a cash balance of almost 60 million euros. He announced resistance to the measures and warned of the financial consequences for the city of Gotha, which could be affected by a shortfall in revenue of around 1.5 million euros. This tension in the local budget is further exacerbated by a deficit of around eight million euros in the administrative budget, which is due to increased social spending.

The first criticism of the district administration's plans has already become loud. The first municipalities such as Georgenthal and Waltershausen are expressing concerns and talking about a tense budget situation. Waltershausen emphasizes that a balanced double budget for 2026/27 will only be possible with massive savings. The municipality of Hörsel is also expecting a budget gap due to the higher levy and declining key allocations.

Outlook and challenges

The financing problem is by no means an isolated case. In Germany, around 240 of 294 districts are indebted or over-indebted, and the German District Association estimates the nationwide deficit at around 20 billion euros. This situation is alarming for all districts because they rely on tax revenue from cities and municipalities. A lack of income from economic development leads to lower district levies and puts additional strain on municipal budgets.

However, District Administrator Eckert remains optimistic. He hopes that the existing deficit can be reduced by the incoming funds from the country's double budget. However, this remains to be seen as municipalities continue to suffer from financial constraints and self-government is at risk. The district council members' amendments, which will be submitted in November, are intended to help improve the financial situation before a decision on the 2026 budget is made in mid-December.

The situation remains tense and there is a lot at stake. The responsibility for a sustainable financial policy will have to come into greater focus in the coming weeks and months.