Schwalbach facing financial crisis: 5.8 million euro deficit looming!

Schwalbach facing financial crisis: 5.8 million euro deficit looming!

The financial situation of the Schwalbach community is worrying. The council has scheduled a meeting for Wednesday, May 28, to discuss the looming deficits. The municipal administration expects a deficit of 5.8 million euros in the results budget by the end of 2026. Together with the municipal companies, the deficit even adds up to over 8.5 million euros, as the Saarbrücken newspaper reported.

This financial imbalance is not just a problem in Schwalbach; many communities face similar challenges. According to a report by the KDZ Up to 40% of communities could no longer be able to finance their ongoing operations independently in the future. In many cases, municipalities now have to check whether they can maintain their previous services at the usual quality.

Painful austerity measures and need for reform

Without additional support from the federal and state governments, significant austerity measures will be necessary. Despite additional funds from the municipal package and the 2024 financial equalization, the municipalities' financial scope remains severely limited. A critical issue is liquidity: many municipalities cannot cover their current expenses without additional funding from the state. In Carinthia, around two thirds of the municipalities are already affected, and medium-term stabilization of municipal finances is urgently recommended.

The recommended strategy includes reforms such as property tax reform and unbundling of tasks and financing. Municipalities are now more than ever required to secure their liquidity, otherwise there is a risk of consolidation. In particular, they must think about reducing or eliminating voluntary services and increasing income potential.

Increased efficiency and digitalization

Another important step towards financial stability could be an increase in administrative efficiency, coupled with a reduction in spending. Digitalization plays a crucial role here as it can make administrative processes more efficient and reduce costs. Merging underutilized facilities, such as schools or kindergartens, could utilize synergy effects and save costs.

Municipalities should also consider adjusting and increasing fees and service charges to achieve cost recovery. A sustainable strengthening of liquidity is essential in order to avoid reductions in the range of services or additional burdens for citizens. To support this process, it is recommended to further develop the role of municipalities and improve cooperation between the city and the surrounding area.

In summary, the Schwalbach community is at a critical point that not only affects its own financial health, but also highlights the far-reaching challenges faced by many communities in the state. The coming meeting could therefore be decisive for the future direction of the municipal finances and their performance.