In the next 5 years

Graz’s mountain of debt grows by almost a billion

The city of Graz's finances have been looking pretty bleak for years: The mountain of debt is getting bigger and bigger.

(Bild: Krone)

On Thursday morning, the city hall coalition of KPÖ, Greens and SPÖ presented the Graz double budget for 2025/26. Debt will increase by more than 800 million euros over the next five years.

Mayor Elke Kahr (KPÖ) began the budget presentation on Thursday with good news for the approximately 9,000 employees in Graz: the state capital will follow the federal government and raise civil servants' salaries by 3.5 percent. But that was the end of the good news. Drawing up the budget was hard work - the current framework conditions are too difficult, as the left-wing city hall coalition of KPÖ, Greens and SPÖ repeatedly pointed out. From the ongoing recession to the sharp decline in revenue shares from the federal government, all local authorities are currently facing enormous challenges.

"However, we currently have a fully financed budget," said Kahr's party comrade and city councillor for finance Manfred Eber. However, it is not balanced, which is why the state capital's debts continue to rise.

It currently stands at 1.744 billion euros - although the sound barrier of two billion will not be broken until 2026, one year later than originally forecast, the mountain of debt will increase to 2.545 billion by 2030, which is more than 800 million euros more than this year!

The city's mountain of debt will rise sharply over the next few years, climbing to more than 2.5 billion euros.

(Bild: Krone KREATIV/Adobe Stock)

The operating balance is negative this year at around 85 million euros, "due to payments on account from the state", as Eber notes. Next year, it will be positive at around 26.1 million euros, and in 2026 it is expected to be negative at 57.8 million euros. "We won't be able to sustain this in the long term. That's why we will make good use of our cash credit limit of a maximum of 180 million euros per year," says Eber.

Presenting the Graz budget: Robert Krotzer, Judith Schwentner, Elke Kahr, Manfred Eber and Daniela Schlüsselberger (from left).

(Bild: Foto Fischer, Graz)

Despite these rather modest prospects, the city plans to invest one billion euros by 2030 - including the coach house in Steyrergasse and the Josef-Huber-Gasse railroad underpass. According to Deputy Mayor Judith Schwentner (Greens), another coach house (in Eggenberg) is also on the cards, as is the redesign of Tummelplatz next year. In addition, an analysis of the potential for the south-west line, including the redesign of Griesplatz, is currently being prepared. The planning decision for this should be made in the first quarter of 2025.

Kahr is hoping that the federal and state governments will provide further funding in this regard. She is therefore delighted to have already received a letter from the new governor-to-be Mario Kunasek (FPÖ). "He has assured me that the future state government will not forget the state capital."

Many departments have to tighten their belts
But what do the new budgets look like in detail? There is more money for the Department of Education and Integration (62.1 instead of 60.3 million euros). There will be less for the Social Welfare Office (from 12 to 10.3 million euros) and the Cultural Office (12.5 instead of 14 million euros) will also have to tighten its belt. One of the big losers (once again) is sport. The budget has fallen below five million and is now only 4.8 million euros.

Fierce criticism from the opposition
Biting criticism comes from the opposition: "This city government has failed to recognize the seriousness of the situation and is fuelling the debt explosion instead of finally making course corrections," Neos parliamentary group leader Philipp Pointner, for example, fires sharply. He also criticizes the fact that the controversial annual appropriation of 250,000 euros for the city government remains in the budget. "The coalition continues to rely on debt to keep its head above water and leaves the people of Graz to foot the bill."

The view of ÖVP parliamentary group leader Anna Hopper is very similar: "With this budget, the city of Graz is getting more and more into difficulties. This budget is proof that Kahr and the KPÖ cannot manage." Numerous subsidiaries in the coalition's area of responsibility are making record losses - from Wohnen Graz to the parking service and the GGZ. In addition, the mountain of debt will grow faster in the next five years than in the previous two decades.