Reaction to financial difficulties

Cash-strapped municipalities to get money faster

The fact that there is a financial bottleneck in many municipalities is nothing new - this year too, more than half of them will probably not be able to balance their budget without help from the state. An initiative from the municipal ministry should now at least ensure that these municipalities receive money for investments more quickly.

Budget proposals from municipalities that are in the red are examined by the state - specifically by the district authorities (BH) - and in the best case approved. The state then compensates for the deficit. It takes time for this process to be completed - and in the meantime, the mayors' hands are tied. They are not allowed to make any new investments in their municipalities.

208 hardship compensation municipalities expected
According to local government councillor Michaela Langer-Weninger (ÖVP), 60 such estimates have currently been checked and confirmed, but this is unlikely to be the end of the story: As a response to an inquiry by Langer-Weninger's departmental colleague Michael Lindner (SPÖ) shows, the BH auditors estimate that 208 out of 438 Upper Austrian municipalities will become hardship equalization municipalities this year.

Municipalities hand over a lot of money to the state
While Langer-Weninger identifies a "nationwide problem" here and calls for "noticeable relief for the municipalities" in the financial equalization system, SPÖ municipal spokesperson Tobias Höglinger takes Governor Thomas Stelzer (ÖVP) to task. He should convene a "transfer summit to unbundle the payment flows between the state and municipalities". After all, the municipalities would pay 425 million euros more to the state than they receive back from it.

Lack of funds for municipal projects
Höglinger is particularly concerned about the 150 million euro state levy: this is not reserved for municipal projects, but is "simply absorbed into the general state budget". Conclusion: there is not enough money for childcare, schools, fire departments, clubs or municipal roads.

Faster budget reviews
The catch: unbundling payment flows would be a long-term project that would hardly help the underfunded municipalities in the short term. Langer-Weninger's municipal department is therefore focusing on the aforementioned budget audits. By using digital tools and with the help of retired civil servants, these are to be carried out more efficiently and quickly. In this way, all available estimates are to be checked by March at the latest.

According to the ÖVP politician, the future goal is for all complete estimates to be completed within a week. "The aim is to get a quicker overview of the financial situation so that the municipalities can adopt their budgets promptly and thus get to work more quickly," says Langer-Weninger. The mayors of the affected municipalities will be pleased - they have only known about the new measures since Tuesday.