Association of municipalities warns

“The financial situation is tense”

Higher childcare costs are a burden on local authorities.(Bild: stock.adobe.com null)

The ÖVP-affiliated Association of Municipalities warns of liquidity problems in the municipalities. In order to provide relief, it is calling for a cap on payments to the state.

For Leo Radakovits, President of the Association of Municipalities, it is clear what has led to the tense situation in municipal finances: the general economic situation with high interest rates and inflation as well as rising personnel costs. At the same time, revenue shares have stagnated. In particular, costs for child and school care, rescue services, healthcare and social welfare, which are borne jointly with the state, are developing very dynamically.

Capping costs
"Good things in themselves, but they must not place an excessive burden on the municipalities," says Radakovits. His proposal: a cap on the costs for the municipalities. He also takes a critical view of the state's additional claim for the hospital levy for 24 years amounting to 22 million euros.

The most recent municipal package, which provides for an increase in the needs-based allocations from 45 to 70 million euros, "only partially addresses" the liquidity problems. Further demands from the President of the Association of Municipalities: An earmarked use of the state levy for municipal investments. Outstanding municipal subsidies should be paid out. "We are ready for talks," says Radakovits.

We need to talk about the level of payments to the state and a cap must be placed on the costs for the municipalities.

Leo Radakovits, Präsident Gemeindebund

Bild: Philipp Wagner

Negotiating a sensible package
Deputy Provincial Chairwoman Astrid Eisenkopf (SPÖ) appealed to the Association of Municipalities to "devote its energy and efforts to negotiating a sensible financial package with the federal government that actually helps the municipalities".

"Pull together"
A planned municipal package had also failed due to resistance from the ÖVP. The SPÖ association of municipal representatives emphasized that they had expected "cross-party support" for the increase in the needs-based allocations. "Instead of criticizing, we should pull together," said President Erich Trummer.