State parliament in Graz

Municipal finances a major topic in the provincial parliament

State parliament meeting in Graz.

(Bild: Stoimaier)

The third parliamentary session of the current legislative period is dominated by the precarious financial situation in many municipalities. In 20 Styrian municipalities, the budget situation is extremely precarious.

Styrian municipalities and cities are on the ropes - the provincial capital Graz and the district capital Bruck are just the most prominent examples. On Tuesday, the financial challenges are therefore also the dominant topic of the provincial parliament session on Tuesday.

There will be a topical hour right at the beginning, introduced by the SPÖ on this topic: "Because a Styria worth living in is not possible without the incredible commitment of our municipalities," says MP Stefan Hofer. "It's about the competitiveness and financial survival of our municipalities." 

"Abolish the Styrian malus"
Provincial Councillor Stefan Hermann (FPÖ) does not want to hide the precarious situation: "But despite all the problems, municipal services of general interest are not at risk. Our biggest goal in this period is to finally abolish the Styrian malus in financial equalization." 

Provincial Councillor Stefan Hermann (FPÖ).

(Bild: Jauschowetz Christian)

Deputy Governor Manuela Khom (ÖVP) points out that under the last government, the municipalities in Styria already received a total of 70 million euros for the maintenance and expansion of crèches and kindergartens in addition to the 35 million euros stipulated in the financial equalization. "We were and are the only federal state that has additionally supported the federal government's 2020 municipal investment program with state funds."

Member of the state parliament Robert Reif (Neos).

(Bild: Christian Jauschowetz)

"We need new solutions"
For Neos MP Robert Reif, these references to the past are not enough: "Normally, I am also in favor of the famous 100-day grace period for new governments - but not on this issue, we need a solution now and I haven't heard any proposals yet."

Lambert Schönleitner (Greens) takes a similar view: "The municipalities simply can't take any more. That's why we now need a complete overhaul of municipal financing." In his view, it won't work just by making savings and hoping that the economy picks up. He is calling for new solutions in the area of revenue: from an increase in property tax to a reorganization of municipal tax.

FPÖ rejects additional burdens
This is not an issue for the Freedom Party: "We reject an additional burden for citizens and companies in order to improve the municipal budgets," clarifies MP Philipp Könighofer. "I also don't believe in only relieving the burden on municipalities that have left - that would be unfair to those who have planned ahead. It's also about the municipalities' own responsibility."

The Neos then also submitted an urgent question on the subject. The bottom line is that the search is on for the perfect solution. After all, it is not only the municipalities that are struggling financially - the state coffers are known to have a gaping hole of more than 900 million euros, and the federal government only narrowly missed an EU deficit procedure. All parliamentary groups therefore agree that Styria must finally be treated more fairly in the course of financial equalization.

The Styrian ÖVP leader Manuela Khom.

(Bild: Land Steiermark)

Fair financial equalization would bring Styria 130 million euros
The municipal revenue share per capita in Salzburg in 2022 was 1,590 euros, whereas in Styria it was only 1,295 euros, as the Neos calculated. "With a fair financial equalization, we could bring an additional 130 million euros to Styria," calculates ÖVP leader Manuela Khom. "That would be financial leeway that would provide significant support for the municipalities."

This is why the blue-black coalition wants to discuss a revision of the financial equalization system with the new federal government ahead of schedule - which is actually not planned until 2028. "That is of course to be welcomed," says SPÖ mandatary Wolfgang Dolesch. "Styria has always shown solidarity in this regard. When the textile industry in Vorarlberg went down, or when it was necessary to revive the mountain farming villages in Tyrol. But when the industry in Upper Styria collapsed, solidarity suddenly came to an end." 

Poor credit rating for 74 Styrian municipalities
Khom's answers to the Neos' urgent question are very interesting. According to this, 20 Styrian municipalities have informed the state about their currently extremely tight liquidity situation as of February 10, 2025. A total of 74 municipalities were given the worst credit rating by the province's Department 7 - that is a whopping 54 more municipalities than recently. However, the municipalities' 2025 budgets have not yet been fully assessed.