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Financial Problems in Austrian Municipalities

Published: April 16, 2011; 13:27 · (Vindobona)

The revenue of Austrian municipalities should not be fall further in 2011, however, new expenditures will be caused by additional competences.

Financial Problems in Austrian Municipalities / Picture: © Vindobona.org

The financial situation of Austrian towns and cities remained tight. Liabilities already amounted to € 11.4bn in 2010, € 6.4bn to be added because of separately-owned companies.

The revenues are to reach again the level of 2008 in 2011. But expenditure will also increase due to additional tasks, which in turn will cause the lack of funds for investments. The surplus from current operations is forecast to decline considerably by 2014: from € 1.4bn in 2010 to € 460m in 2014. As a result, there will be a lack of funds for investments: for 2014, the deficit of current and extraordinary expenses will amount to € 1.00bn.

This is going to be felt by the real economy. So far, cities and municipalities have been active as the largest public investor. According to the forecast, this can change radically.

Countermeasures could be taken by municipal mergers, cooperation and joint organizational units in the fields of hospitals, nursing and child care. The potential for savings is however estimated at a maximum of 10%. The practical difficulty is that the municipalities would have to become active themselves.

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