1.3 billion package

Council of Ministers: More money for Austria’s municipalities

Want to help the municipalities financially: Chancellor Nehammer, Vice-Chancellor Kogler, Finance Minister Brunner (from right)(Bild: APA/ROLAND SCHLAGER)

Austria's municipalities will receive additional funding from the federal government over and above the financial equalization. A package put together by the Council of Ministers on Wednesday comprises a sum of more than 1.3 billion euros, of which 920 million are "fresh funds".

"We are literally giving cities and municipalities the air to breathe financially," said Federal Chancellor Karl Nehammer (ÖVP) after the meeting. The measures come just in time for the start of the Congress of Cities and Towns in Wiener Neustadt.

Investment program for municipalities
The financial equalization scheme provides for higher transfers from the federal government to the provinces and municipalities. Including the funds to strengthen the established sector through social insurance, the agreement on financial equalization covers an average volume of 3.4 billion euros per year from 2024 to 2028. Even if the municipalities benefit from these additional federal funds, the financial scope remains limited, particularly for investments.

The federal government is now making an additional 500 million euros available for a new municipal investment program in the years 2025 to 2027, with the federal government's co-financing share being increased from 50% to 80% compared to the previous programs. In order to also support groups of people who have difficulties applying for federal funding that was previously only available in digital form, municipalities will be granted a special purpose grant of 120 million euros to promote the further expansion of the digital transition in municipalities.

Appreciation for mayors
For Nehammer, the government's third investment package for the municipalities shows appreciation for the work of the mayors. Finance Minister Magnus Brunner (ÖVP) sees this as an important measure to counteract the ongoing economic downturn. Vice-Chancellor Werner Kogler and Climate Protection Minister Leonore Gewessler (both Greens) were particularly pleased about the earmarked funding for measures to combat the effects of climate change.