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Tübingen cracks the budget crisis with tax hikes
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The city of Tübingen's financial troubles have led Mayor Boris Palmer and the city council to approve tax increases, as confirmed. Expect a rise in property and business taxes, effective January 1, 2025. This adjustment means increased financial burdens for property owners and businesses.
The proposed changes see the business tax rate climbing from 390% to 405%, and the property tax B increasing from 270% to 350%. Notably, property tax C, which covers build-ready, underdeveloped properties within Tübingen, remains at 540%. The tax rate, a self-determined value by municipalities, greatly impacts the level of property and business tax.
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### Rising property taxes in Tübingen: From 270 to 360% - Palmer seeks a significant hike in the tax rate
Facing the outrage of Tübingen residents, Mayor Palmer admits the rapid spike in property taxes over six months has led to discontent. "In light of the tough financial situation of municipalities in Germany, we simply have no other option," he explained. Without the tax hikes, budget approval would be jeopardized.
### Budgeting in Tübingen: A grim outlook
With the new budget plan set for approval by the city council on July 24, 2025, Tübingen faces a staggering deficit of approximately 24.5 million euros. The city now finds itself the second in Baden-Württemberg to enact retroactive tax increases.
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### Mayor frustrated with Minister of the Environment "Try it out" - Palmer advocates for a ban on single-use items
With France already mandating reusable containers at fast-food establishments, Boris Palmer proposes a similar initiative for Baden-Württemberg. However, Minister of the Environment Walker (Greens) is reluctant.
Despite efforts to curb expenses, such as hiring freezes and cost reductions in non-essential areas, the city faces ongoing construction project delays due to a lack of funding. The additional revenue from tax increases and further savings of 8.8 million euros from construction projects are planned to offset the budget deficit.
The state of Tübingen's finances
Back in January 2025, the Tübingen city council adopted a comprehensive budget consolidation plan with savings of 12.4 million euros across all sectors. However, with deteriorating tax revenue forecasts forcing the government presidency of Tübingen to withhold budget approval, Mayor Palmer implemented a freeze on new hires and reduced expenditures in non-essential areas.
Recently, Tübingen introduced a new method for calculating property tax, which emphasizes plot size over what's built on it. Municipalities can manipulate the property tax rate using a multiplier, but it must be done in a revenue-neutral manner to maintain the same income level as before the tax reform. Changes in plot size, construction, or ownership can result in varying property tax amounts, so long as the city's total income does not increase.
The financial woes in Tübingen have led Mayor Boris Palmer to advocate for a ban on single-use items as a potential source of revenue generation in politics, beyond the tax hikes.
The city's ongoing struggles with budget deficits have seen Tübingen adopt a new property tax calculation method in finance, with the aim of generating additional income and initiatives to cut expenses in general-news.
