Local general provision in danger: Financial crisis of the cities threaten!

Local general provision in danger: Financial crisis of the cities threaten!

The financial situation of the Austrian communities is alarming and urgently requires measures such as current analyzes of the KDZ - Center for Administrative Research and the Austrian Association of City. In order to maintain municipal general services, cities and municipalities have to make do with fewer and fewer financial resources by 2028, which could lead to drastic performance cuts. Without significant reforms and financial support, there is a serious crisis. These challenges are reinforced by the pandemic and the associated economic effects that have been going on for a year and a half. According to the forecast by 2024, the municipalities' financial scope will fall back to a critical level again, since the ongoing income cannot keep up with the expenditure, such as reported.

The KDZ predicts that around 45 percent of all communities will be deficient by 2025, which is a worrying trend. The balance of operational building, i.e. the funds for investments after covering the operating costs, will only reach half of the 2019 level in 2026. This means that important investments, such as in the areas of education, health and climate protection, are massively endangered. The drastic cuts are in line with the precarious state of the municipal finances, which depend heavily on state and federal grants, such as the analysis of the ots.at makes it clear.

According to forecasts, the municipalities are in an increasingly worrying situation. A fundamental reform of the municipal taxes and an unbundling of transfers between the countries and the municipalities are indispensable to prevent the impending performance of performance. It is strongly recommended to suspend the repayment of the advance of the 2nd parish package in order to provide the communities. Without immediate measures, many municipalities are faced with the serious danger of no longer being able to maintain essential services. Experts appeal to all decision -makers to take measures to ensure the financial resources of the municipalities and to implement reforms effectively.