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FAG Pact 2024: New approaches to public transport funding

Karte und Tabelle zu den Güteklassen für kommunal finanzierte ÖV-Angebote

© Österreichischer Städtebund, Rathaus, A 1082 Wien

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Picture of Robert Kalasek in front of a white background

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Robert Kalasek (SRF, TU Vienna) and Arthur Kammerhofer worked on a project in the first half of 2023 on behalf of the Städtebund with the aim of evaluating the so-called public transport quality classes of the ÖROK against the background of the financing of public transport services at different administrative levels. The quality classes determined for municipally financed public transport services ultimately formed the basis for a model for the redistribution of FAG funds in public transport according to structural and performance parameters, which was developed in cooperation with the company KCW GmbH.

The project had a concrete impact during the negotiations on financial equalization for the next five years. Ultimately, an increase of 30% in §23 FAG funds was achieved in the course of the negotiations.


The transport sector accounts for a third of greenhouse gas emissions in Austria and is the fastest growing sector, especially passenger transport. According to the Mobility Master Plan, the share of local public transport in total transport must be increased from 27% to 40% by 2040 in order to achieve more than 50% of the reduction target in the transport sector. If the climate targets are not met, the Court of Auditors estimated the cost of purchasing emissions certificates at EUR 9.214 billion. In the opinion of the cities, these funds should be invested in Austria today with foresight in order to prevent the climate targets from being missed (source: stä, opens an external URL in a new window).

The state capitals have identified an investment requirement of around € 1.9 billion for fleet renewal, service and capacity expansions up to 2025. Estimated investments of a further € 3.84 billion are expected for the period 2026-2030. However, cities are under considerable pressure due to rising passenger numbers as a result of the climate ticket and federal requirements to convert vehicle fleets. As a result, necessary infrastructure investments are being postponed in order to ensure ongoing operations. According to a recent survey by the KDZ, opens an external URL in a new window – Center for Public Administration Research – from June 2023, expenditure in urban public transport is currently growing twice as fast as income.

The Association of Cities and Towns has therefore submitted proposals to the Federal Ministry of Finance and the Federal Ministry for Climate Protection for a task- and efficiency-oriented financing of urban public transport. As part of the FAG Pact 2024, an agreement was reached with the federal government that includes the following changes to public transport:

Financial allocations for municipalities for local public transport (§23 FAG): + €30m/a (= +30%)

  • instead of criterion "investments in tram/bus": "provincial capitals > 100,000EW" -> new advance share for Klagenfurt
  • School transport/occasional transport: + €10 million p.a. (extraordinary adjustment of indexed fares)
  • Future fund: 1.1 billion €/a
  • Elementary education: 45.5% (2024: 500 million)
  • Housing/renovation: 27.25% (2024: 300 million)
  • Environment/climate 27.25% (2024: 300 million): measures in the transport sector / investments in the expansion of public transport can also be subsumed here