Tyrol’s communities are largely heavily indebted, and an increase in property tax B, which has remained untouched since 1993 – as introduced by the ‘sugar coalition’ – is exactly right. However, the project also has dark sides, as the Tyrolean community association now emphasizes.
As reported, communities in Tyrol are facing difficult times when it comes to financing the community’s own tasks. An increase in property tax B for building land, which has not been adjusted since 1993 and no longer reflects the real land value, especially in Tyrol’s expensive residential area, could provide relief.
First reforms, and then think about increases
The community association is obviously in favor of property tax reform. But not without ifs and buts, but with a whole series of limitations. There is one important reason for this: “We manage ourselves to death in many areas,” says Karl-Josef Schubert, president of the community association. “We first need administrative reforms and reducing bureaucracy before we think about raising taxes.”
Everyone would be affected
According to Schubert, a planned increase in property taxes throughout Austria would mainly have an impact where building land is already scarce and expensive – for example in Tyrol. “There is a risk that this will make the already expensive life in Tyrol even more expensive. Because property taxes affect everyone through operating costs,” he warns.
Endless transfers: money is sent in circles
The municipalities have an urgent expenditure problem, the association’s president explains, using the specific example of the municipal medical district, a medical on-call service for deaths, alcohol test refusers and medical officer assignments. “Tyrol has seventy such districts – Vorarlberg can get by with three.”
The Convention should provide solutions
There are many such examples. “Childcare, safety, local public transportation, transfer payments: the money is sent back and forth between municipalities, the state and the federal government.” The Tyrolean Convention, founded by Governor Anton Mattle, has exactly this task.
No new tasks please
These structural reforms should range from administrative simplifications to a reform of transfer payments between local authorities and structural changes in the organization. “Property tax reform should then bring relief to strained municipal budgets. However, this reform of property tax should not lead to the federal government entrusting new tasks to municipalities, for which insufficient financing is available.”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
