Monday 21 October 2019

Property tax to rise by 10%

Councillors reject 15% rise recommended by executive team

Cllr Tom Fortune
Cllr Tom Fortune

Eimear Dodd

Wicklow County Council voted to increase the Local Property Tax (LPT) in the county by ten per cent above the base rate at a meeting on Monday.

Council officials say the increase will mean €1.724 million in extra revenue. The money raised is to be ring-fenced for projects in areas including climate adaptation, transport and public services.

Wicklow is among the local authorities which can increase or reduce the tax by up to 15 per cent on the base rate set in 2014, because they have to subsidise other counties where the property tax take is low.

At Monday's meeting, Brian Gleeson, Director of Services, told members that 51 submissions were received during the public consultation. Of these, 25 favoured no change to the rate, 20 asked for a decrease, one asked for an increased rate and five made a general comment.

Mr Gleeson outlined factors affecting the council's 2020 budget, including reduced income next year of €1.3 million. Sources of funding available to the council were restricted in part due to a Government decision to defer new LPT valuations. There have been 4,000 new properties built in the Garden County since 2013 that have yet to pay the tax with the estimated value of LPT missed at €1.2 million.

The council is required to provide match funding for a number of new projects funded under the National Development Plan. Funding of €26 million had been secured to date and the council has to match this with €5.7 million.

'The last thing we want to do is have to go back to the Department and say we don't have the money and lose out on crucial funding,' Mr Gleeson said.

Climate action initiatives, rising inflation, legacy staff pension costs and requests for increased funding also had to be considered. He noted that a change of one per cent in the LPT rate was worth around €172,436 in increased or decreased revenue for the council. Therefore, a 15 per cent increase would add €2.58 million in extra revenue.

Without an increase, services would have be cut to balance the budget, councillors were told. Schemes at risk included community grants and Municipal District allocations.

During the discussion, many councillors raised concerns about the design of the LPT process. Several pointed out that homes built since 2013 were exempt from the tax. A number of members said they were unhappy that the council had to subside local authorities with a lower property tax take. Others criticised local TDs, who they said, had not spoken up sufficiently at a national level on the issue of LPT and funding for services in Wicklow. A number of councillors suggested that the eight-week period before the council's budget meeting could be used to review costs. Some councillors spoke about their worries for projects if match funding was lost.

Cllr Mary Kavanagh (Ind) said that voters were against the increase and councillors had to 'abide by their wishes', particularly in light of other living cost increases.

Cllr John Snell (Ind) said it was unfair that new houses built since 2013 had 'not paid one red cent of LPT'.

Cllr Tom Fortune (Ind) said the LPT process was a 'charade' and 'ridiculous' for both councillors and the executive. 'We're being asked to make decisions with one arm tied behind our back,' he said. Cllr Fortune said he had written to local TDs inviting them to attend, however, only Deputy Pat Casey (FF) had come to the meeting. He suggested that the council keep the money used to subsides other councils and use this to cover any shortfall.

Cllr Derek Mitchell (FG) highlighted that many properties in the Greystones LEA would pay more due to the higher property values, yet the money was not spent in the area. While he couldn't support an increase of 15 per cent, Cllr Mitchell said he would support one to reflect increased inflation.

Cllr Jennifer Whitmore (SD) said that the LPT 'was not fit for purpose' as the county's population increase was not taken into consideration. She noted there was no appetite at national level to tackle the issue before a general election.

Cllr Miriam Murphy (Ind) highlighted the importance of community grants to local groups adding that new houses being constructed would require amenities. Funding could also support the employment of council staff including a disability officer.

Cllr Dermot O'Brien (SF) said that the LPT system was 'dead' and the national Government was 'insulting the autonomy' of local authorities.

Cllr Steven Matthews (GP) said that 'no one wants to raise taxes', however, councillors had to be 'responsible' given the budgetary situation.

Cllr Gerry O'Neill (Ind) said he could not support an increase when part of Blessington's LPT was going to Kildare County Council.

Cllr Avril Cronin (FG) highlighted a lack of services in west Wicklow and asked for reassurance that any increase in LPT would only apply for 2020.

Referring to Brexit uncertainty, Cllr John Mullen (FF) said a larger conversation was needed about the budgetary process, while Cllr Pat Fitzgerald (FF) said he felt there was no option but to support an increase in the circumstances.

In response, Mr Gleeson agreed there were issues with the LPT process and this extra revenue would be ring-fenced for specific projects in the county. The council cannot keep their contribution to the equalisation fund as they don't receive it from Revenue. He added that the council's costs were continously reviewed and this would take place as part of the budget process.

Members agreed to a motion put forward by Cllr Fortune that the council should carry out a full review of spending over the coming eight weeks. There was unanimous agreement to Cllr Whitmore's motion to write to the Minister for the Environment about the cost of the LPT waiver. Cllr Whitmore's motion that the council must approve feasibility studies that cost over €100,000 was amended to have them included in the Chief Executive's monthly report due to a concern raised by the council administrator about possible delays.

Cllr Shay Cullen (FG) proposed a ten per cent increase in LPT rate for one year on the basis that it is used for match funding and discretionary funding remains in place.

Seconding the motion, Cllr Irene Winters (FG) said this was a difficult decision for all councillors, regardless of their stance.

Cllr Snell proposed no change to the rate and this was seconded by Cllr Kavanagh. Members first voted on Cllr Snell's motion with eight in favour of no change to the rate, 21 voting for change, one abstention and two Councillors not present.

A vote was then held on Cllr Cullen's motion to increase the LPT rate by ten per cent. 21 members voted in favour of the motion to increase the base rate by ten per cent, eight, including Sinn Fein and some Independents, voted against, two were not present and one was recorded as abstaining. Cllr Fortune, who was noted as abstaining, said that he had voted, but did not support the LPT.

Bray People