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Rural politicians threaten 'revolt' over minister's property tax plan

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Environment Minister Alan Kelly

Environment Minister Alan Kelly

Environment Minister Alan Kelly

Environment Minister Alan Kelly has sparked a rural revolt after telling almost 20 local authorities that they cannot slash their property tax rates unless they cut local services.

The Irish Independent can reveal that political groups on a number of these councils will attempt to defy the minister's guidelines and press for a full 15pc reduction for homeowners in their areas.

Dozens of councillors who spoke to the Irish Independent expressed anger at being handed the stark warning by the newly appointed minister.

But moves to slash property tax bills for hard-pressed homeowners would push a raft of local authorities into deep financial trouble.

Figures produced by the Department of the Environment show that 20 local authorities are technically insolvent, and are relying on overdrafts and bank borrowings to meet day-to-day expenses.

Some of these local authorities - such as Wicklow, Clare, Meath and Kildare - are set to slash the property tax by 15pc despite being in the red.

An analysis by this newspaper also reveals that the finances of several other councils would be plunged into serious difficulty if they slash property tax rates.

The power to cut families' property tax bills rests solely in the hands of city and county councillors who this week learned which councils can best afford such a move from the government's perspective.

An interdepartmental working group identified 12 councils, most of which are on the east coast, which it said could afford to reduce bills for homeowners.

Ten of these councils can manage to reduce rates by the full 15pc as laid down in legislation, while two by some 5pc, the group said.

The rationale behind the plans is that surpluses generated by homeowners in the 12 local authorities will be channelled to the less well off areas through the form of top-ups.

However, Mr Kelly has sparked a furious reaction from members of rural councils who have vowed to test his claims that reducing the tax would have to be matched with cuts elsewhere.

This is particularly the case in areas represented by councils which have large Sinn Fein, Fianna Fail and independent representatives. Cathaoirleach of Monaghan County Council, Padraig McNally (FF), said that he would be pushing for the full 15pc cut despite the council suffering from a significant deficit.

"Alan Kelly has tried to put a gun to our head and we won't be having any of it. For him to say ten councils can have a reduction and 21 can't is a fatal error and the people here won't stand for it," he said.

Councillors in Tipperary, Kerry, Cavan, Cork and Longford all said they would also be pushing for the full reduction - despite the warning that they will be forced to cut services.

But representatives in local authorities which cannot afford the cut without affecting local services are still pushing for the full 15pc reduction.

Councillors in a number of local authorities who are struggling with significant debt insist they will not accept the direction of the minister.

Expensive

Longford councillor Mark Casey said: "It is so expensive to live in rural Ireland. If Fine Gael and Labour wanted to introduce this property charge, why did they introduce the 15pc mechanism and then tell us we can't use it. Kerry councillor Toireasa Ferris said her Sinn Fein delegation are demanding the full 15pc reduction despite a recommendation by the minister for a 4.2pc cut.

Tipperary councillor Jim Ryan (Ind) said he and his colleagues have been promised that the council's financial position has improved since the amalgamation of North and South Tipperary districts.

City and County managers in some areas will struggle in their bid to convince councillors that voting for a cut will put finances under pressure.

Irish Independent