We are quite the topic in the Law Society at the moment. The following thread includes comments and criticism, some of which I think is spot on.
Law Society Thread on Neualtenburg
One of the points is that Neualtenurg is, essentially, a residential sim. This has long term ramifications for the economy and the city budget. Barring significant changes in zoning and revenue structure, I believe the current sim is unlikely to ever attract significant commercial activity. Coupled with the impending demise of Dwell/DI, the long term revenue projection is land fees and that's it.
This makes the original sim a place where people pay for the privilege of participating. There's nothing intrinsically wrong with that. although it makes Neualtenburg "clubby" to some extent. The sim is currently just over 3/4 occupied. Assuming an eventual 90% occupancy, you are left with a monthly surplus after making the tier payment to Linden Labs of roughly 65USD/month. If the city intends to pay artisans for their work on public infrastructure (remember the Gilde strike?) There won't be much government spending, ever.
If the city wishes to continue to spend and grow, there are two options.:
Option one is to add sims and operate off the surplus income from land "sales". The problem here is, of course, that more sims means more infrastructure to build and maintain, not really solving the long term revenue problem.
Option two (much harder, but more sound in the long term) is to find something for which residents are willing to pay, put it on the sim, market it, and make sure the city gets a cut. Questions here include - What? Where to put it? (large lots inside the walls are not to be had) How to get a piece of the revenue to the city government? (Any broad based tax would be revolted against , in all likelihood. Maybe the city could be a real partner with a private entrepreneur--either through donating land or waiving fees, in exchange for a cut of gross revenue)
Or are we happy to be funded by residents willing to pay their money and built by residents willing to donate their time?