To fulfil their important tasks, Austria’s cities and municipalities do not only have to implement much-needed reforms and acceptable austerity packages but must above all provide impetus to growth. Investments are indispensable to pull them out of the crisis and to make them fit for the future.

Häupl calls for growth package

This was the conclusion to which incumbent president of the Austrian Association of Cities and Towns Michael Häupl came in his opening speech at this year’s 62nd Day of Cities. The three-day event was held for the first time in Dornbirn, one of the most important cities of Vorarlberg. “The stability pact is not enough“, said Vienna’s mayor. He emphasised that “an upswing will not be possible just by curbing costs, we also need a growth pact.” According to the mayor, “a new financial equalisation system and a modern municipal tax scheme” were also required. The new financial equalisation system had to be attuned to the tasks performed by the respective municipality rather than to the number of persons living there permanently. Häupl stressed the importance of cities and municipalities for the national economy and the welfare state. Cities were centres of innovation and laboratories of progress. “They make available top-quality municipal infrastructure, which serves as a best practice internationally, and thereby promote economic development. They provide impetus to entire regions, create jobs and infrastructure for their residents and their surroundings”, said Häupl. In the past few years, the cities and municipalities had made a vital contribution “to cushioning the severest consequences of the crisis and keeping up the momentum“. Besides performing core tasks in the area of general-interest services, they also financed a major part of Austria’s social system through social transfers. Therefore, it was “important to keep the economic engine ‘city’ running, even from a national perspective“.

Weninger: austerity threatens local infrastructure

“Municipalities are the backbone of the community. Thomas Weninger, secretary-general of the Austrian Association of Cities and Towns, emphasised in his statement that municipalities provided a functioning local infrastructure with attractive jobs, schools, nurseries as well as local public transport”. He was also of the opinion that – besides the efforts to implement the stability pact – growth stimuli and significant investment in education were decisive measures to combat the crisis. After the federal government, the cities and municipalities were the second most important public investor. Their investments benefited social cohesion and democracy. A stringent austerity policy posed a risk to the welfare of the citizens, who were still enjoying a high quality of life and excellent local infrastructure. The secretary-general of the Austrian Association of Cities and Towns demanded once again that sufficient financial resources had to be made available to the local authorities and criticised budget cuts affecting for example the right of educational facilities to deduct VAT. This measure was extremely annoying as it increased the cost of educational building projects by 20 percent. To safeguard the capacity to act of the cities and municipalities, extra income was required, said Weninger. He called for a reform of the land tax (the second most important tax of the municipalities) as the rateable value of real estate on whose basis the land tax was calculated had not been raised for decades. "What we need are comprehensive structural reforms, a clear separation of tasks, an unbundling of social transfers, the elimination of duplication and a  task-oriented financial equalisation system”, concluded Weninger.

Survey: satisfied citizens

On the 62nd Day of Cities in Dornbirn the latest survey conducted in the framework of the Cities Barometer was presented. This study is prepared every year by SORA (Institute for Social Research) in Vienna. The latest findings: Austria’s cities and municipalities provide a municipal infrastructure that is considered exemplary at international level. The population was extremely satisfied with the potable water supply (97 per cent), waste disposal (94 per cent) as well as healthcare facilities (90 per cent). Citizen satisfaction with the townscape (88 per cent) as well as the maintenance and care of public parks (85 per cent) was also high. According to the overwhelming majority of those surveyed, municipal services should not be outsourced to private providers. The Cities Barometer 2012 was the first survey of this type asking questions about migration flows within Austria. More than half of the persons surveyed stated to have moved to the municipality where they were currently living. 54 per cent of the persons moved from a smaller to a larger municipality, one fourth migrated from a large to a smaller municipality, while one fifth of the persons came from abroad. Work was stated as the main reason for migrating to cities, while people moving to smaller municipalities did so mainly for family reasons. The conclusion of the survey: migration to the cities is continuing and will remain one of the main challenges facing the municipalities in the future.