The pandemic left 80-million-euro hole in the Linz budget

According to Mayor Klaus Luger, unemployment is down compared to 2019, but the city has collected less in taxes

Today, Klaus Luger, the mayor of Linz in Austria, spoke out about the city’s difficult financial situation due to the pandemic. After a year and a half of lockdowns, limited re-openings, social distancing measures in retail and public spaces, the budget balance for 2021 has a hole with the precise size of 80 million euros.

According to the ORF, the Austrian National News Network, Mayor Luger explained the city will have a hard time filling in the gap with loans. Local authorities are now looking to create a comprehensive investment package to the tune of 65 million euros for 2022. The idea behind it is to accelerate the future development of the city.

Unemployment is down, but so is the collected tax revenue

It sounds paradoxical, but according to the city’s own account unemployment is down compared to 2019 levels, however, it has overall collected less in taxes. The pandemic has left a serious mark on the local budget, as authorities report they have received 50 million euros less in 2020 and 30 million less in 2021.

At the same time, the labour market has been stabilising and is currently in much better shape than it was before the crisis. In 2019 there were 10,000 unemployed and 20,000 registered as short-term workers. Now, the unemployed are just 7,400.

Government spending – get the ball rolling and reap the dividends in the long-run

The low unemployment and reduced revenue are partly due to the government’s infrastructure spending programme as an effort to cushion the economic blows of the pandemic. These investments include infrastructure, culture, sports and climate protection, according to Luger.  

Some of that infrastructure includes a new railway bridge, which will have major benefits for public transport. This mobility investment is coupled with an expansion of bus routes and light rail connections with the rest of the federal state of Upper Austria.  

In terms of sports, the city is currently developing two stadiums which is a great source of employment. According to the mayor, COVID-19 has also greatly increased the digitalisation of the administration. These are all long-term projects, which will provide a gradual increase in the value of public services in Linz.

In his statement, Mayor Luger also called for solidarity in the city, as the current vaccine mandate threatens to split an already polarised population.