Deficit in the budget
Head of municipality sounds the alarm: “Taxes heading for bankruptcy”
Only seven municipalities in the district of Freistadt are expecting a positive budget this year. The remaining 20 municipalities are expecting to be in the red. Freistadt and Sandl, among others, will no longer be able to balance their budgets. The mayors are sounding the alarm and see the state as having a role to play.
"We are driving into the wall with our eyes wide open and are heading straight for bankruptcy," explains Gerhard Neunteufel, SP local leader in Sandl. One of the reasons is that the Upper Austrian municipalities have to make the highest transfer payments to the state compared to the rest of Austria. This is due to the above-average levies in the areas of hospitals and social welfare.
"The municipalities have no influence on these payments. That's why such contributions and levies have no place in a municipal budget," says Neunteufel.
Levies are a burden on the budget
Within two years, Sandl had to accept an increase in the social welfare association levy from 368,660 euros to 442,800 euros. The hospital contribution rose from 410,316 euros in 2023 to the current 461,500 euros.
"In return, revenues have recently fallen," says Christian Gratzl, SP mayor of Freistadt, gritting his teeth. The revenue share from the federal government will fall from a forecast nine million euros to around 8.56 million euros in 2025. This is another reason why the district town has slipped into deficit and now has to reduce "voluntary levies" from 500,000 euros to around 170,000 euros.
Threat of cuts and closures
"This means cuts or higher charges in many areas, including closures. For example, the indoor pool, sauna, castle museum, leisure and sports clubs will be affected." In Freistadt, there is also a threat of fee increases. "Increased charges must also be expected for services provided by the municipality," says Gratzl, who sharply criticizes municipal financing. "It is completely inappropriate for district towns and must be changed quickly!"
Five possible solutions
From Gratzl's point of view, there are five possible solutions and demands: The collection of the provincial levy should be suspended and abolished in the long term. The hospital contribution of the municipalities must be significantly reduced. The financing and organization of the care system must be reformed. In order to alleviate the situation in the short term, an aid package for nursing care is needed to reduce the resulting financial burden on the municipalities. There must be no further cuts in the area of voluntary expenditure.
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