The city of Wels has announced its upcoming double budget for 2026 and 2027, demonstrating continued financial discipline and strategic investment, even as many Austrian municipalities face increasing financial constraints amid a prolonged economic downturn.

Across Upper Austria, a growing number of communities are classified as deficit municipalities, with projections indicating that up to three-quarters may operate at a loss in the near future. Wels, however, has managed to buck this trend, largely attributed to a series of structural reforms initiated in 2016. These measures have enabled the city to sustain a surplus and avoid the accumulation of new debt, even while executing substantial public investments.

Significant Investments Without Additional Borrowing

The double budget earmarks over 40 million euros for planned investments, targeting critical infrastructure improvements in transportation, emergency services, noise protection, and community amenities. Notable projects include the construction of a new elementary school (VS 10), the establishment of a modern waste collection center in Wels West, and the development of new kindergartens in Oberfelderhöfe and Noitzmühle. Additionally, enhancements to parks and playgrounds are set to improve the quality of life for residents.

These initiatives are designed not only to enhance municipal services and community facilities but also to bolster the regional economy by safeguarding jobs and supporting local businesses. The strategic allocation of funds aims to foster sustainable growth while maintaining fiscal stability.

Challenges in Revenue Streams and Transfer Payments

Despite these positive developments, the city faces challenges in its revenue streams. Federal revenue shares are rising at a rate below inflation, while transfer payments to the state are increasing at more than double the rate of inflation. By 2027, these transfers are expected to reach nearly 59 million euros, marking an 86 percent increase compared to the decade prior, when inflation is estimated at 37 percent. Such dynamics contribute to the growing financial pressures on Austrian municipalities.

City officials have indicated that addressing these challenges requires administrative reform and the reduction of bureaucratic hurdles, rather than raising taxes such as property levies. The city continues to advocate for regulatory simplification to ensure long-term fiscal health.

Labor Costs and Economic Outlook

Wels anticipates a 4.2 percent decrease in municipal tax revenues for 2026 compared to the previous budget, with a projected recovery of 3.2 percent in 2027. This forecast suggests that economic recovery and job growth may not materialize until later in the budget period, underscoring the importance of national-level economic stimulus measures. In contrast, personnel costs are expected to increase only modestly--by around 2.4 percent in 2026 and 1.5 percent in 2027--due in part to efficiency gains from digitalization and the use of artificial intelligence in administrative processes.

Debt Reduction and Financial Reserves

One of the most notable achievements highlighted in the budget is the dramatic reduction in per capita debt. The city's debt has fallen from 1,167 euros per resident in 2015 to a projected 43 euros per resident in 2027. The overall debt ratio is expected to reach zero percent relative to income by 2027, excluding housing support loans. The city's financial reserves have also grown significantly, rising from 18.6 million euros in 2015 to an anticipated 108.4 million euros by the end of 2024.

Between 2015 and 2027, Wels will have reduced its total debt by over 66 million euros, with the city's outstanding liabilities projected at 2.8 million euros by 2027. These figures underscore Wels' ability to finance ongoing and future investments without resorting to new borrowing, establishing a model of fiscal sustainability that distinguishes it among Austrian municipalities.

Outlook and Governance

The double budget for 2026 and 2027 is set to advance through the city's legislative process, with the finance committee and city council scheduled to review and approve the proposal in the coming weeks. With a robust reserve fund and a clear commitment to balanced budgets, Wels positions itself as a financially resilient city, able to invest in its future without compromising its fiscal health.