900 million euros for communities: This is how you can benefit now!

900 million euros for communities: This is how you can benefit now!

Austrian municipalities are facing significant financial changes, which will be initiated by a new budget design. OE24 reports that communities can benefit from facilitated subsidized investments, although no new money is provided. Finance Minister Markus Marterbauer (SPÖ) emphasizes that funds that have already been promised can now be accessed and used more flexibly. A total of almost 900 million euros is available, as State Secretary Barbara Eibinger-Miedl (ÖVP) informs.

These funds come from three municipal investment laws in recent years, where many municipalities were unable to use them due to insufficient co-financing. From now on, this co-financing will no longer apply and the special-purpose grants will be converted into direct financial allocations. The use of these funds will be made more flexible as long as the investments are implemented in a controlled manner.

Receivables and investments

Marterbauer welcomes measures that help communities save costs and become more attractive to newcomers, for example by expanding child care. Eibinger-Miedl emphasizes the economic relevance of the measures, as communities act as important investors in the regional economy. These funds should be sent directly to the communities without an application, so that the amount of funding can be accessed online within a few days.

The total amount of funds made available amounts to 881 million euros. These investments are intended to help the communities “gain the upper hand again,” emphasizes community association president Johannes Pressl. City Association General Secretary Thomas Weninger is calling for a rapid improvement in the financial situation of the municipalities in order to ensure their stability.

Forecasts and challenges

However, the forecasts regarding the financial situation of the municipalities are worrying. According to the KDZ - Center for Administrative Research, results show that around every second municipality will have a negative financial balance by 2027. Difficulties in financing necessary investments, particularly in the areas of climate protection and mobility, are already foreseeable. KDZ notes that municipal liquidity remains at a low level, similar to 2020. In addition, in 2024, expenses are expected to increase by 6-10%, while revenues could only increase by 4-5%.

By the end of 2025, 45% of Austrian municipalities would no longer be able to cover their ongoing operations, leading to an increased need for financial aid. Municipal points out that both a property tax reform and a better distribution of revenue from the partial withdrawal of cold progression are necessary to strengthen the financial base of the municipalities.

Conclusions

While the new funding could provide short-term relief, the long-term financial stability of communities remains in question. The need to secure the financing of municipal services and the requirements for efficiency improvements are urgently needed in order to meet the challenges of the coming years. Political pressure on communities to support local businesses and services is intensifying, requiring even more careful planning and organization.