35 million euros plus

State gives ailing municipalities a hefty cash injection

Head of the Association of Towns Kurt Wallner, Provincial Governor Christopher Drexler, Deputy Provincial Governor Anton Lang, President of the Association of Municipalities Erwin Dirnberger

(Bild: Jauschowetz Christian/Christian Jauschowetz)

These are tough times for the municipalities in the state - and the outlook is anything but rosy. The state is now helping the ailing municipalities with additional funds from the Future Fund for Elementary Education.

Styrian municipalities are in dire straits. Their financial budgets are ailing, with exploding expenditure set against stagnating income. The financial equalization was also not the yellow of the egg. More and more heads of local authorities are approaching the state and asking for subsidies in order to maintain ongoing operations. The mayor of Bruck, Andrea Winkelmeier, recently pulled the ripcord and imposed a budget freeze.

This surprising measure was warning enough for the state government before the vulture of bankruptcy actually begins to circle over a municipality. The two state leaders Christopher Drexler (ÖVP) and Anton Lang (SPÖ) are now injecting an additional 35 million euros into the white-green municipalities. However, the money does not come directly from the state coffers, but from the federal government's future fund for elementary education. Styria will receive around 70 million euros from this.

Experts expect that almost half of the municipalities in Austria will be in the red financially. The money will then not be available for new investments.

(Bild: Krone KREATIV/Krone KREATIV, stock.adobe.com)

Thanks to the Association of Towns and Municipalities
"Half of it has to be paid out to the cities and municipalities anyway, an agreement had to be reached on the second half," explains the governor. The decision to make the second half available in full to the struggling municipalities was therefore an unbureaucratic and swift aid measure: "We are not abandoning our mayors and are also taking further important steps forward in child education and care," Drexler and Lang announce. Of course, Kurt Wallner, head of the Association of Towns and Cities, and Erwin Dirnberger, President of the Association of Municipalities, applauded the move - especially as the millions of euros could have been used to plug holes in the state budget.

Municipal mergers as the key to tackling financial woes?
Söchau in south-eastern Styria is now considering a merger with the financially stronger Fürstenfeld. Are municipal mergers the key to tackling the financial crisis? "With our municipal structural reform in 2015, we have created a good basis for the future. I therefore see no need for the state to provide for further mergers," says Drexler. However, if an appropriately coordinated initiative is brought to the state by municipalities, "we will of course not be closed to talks".