There will be no reduction to the Local Property Tax rate in Galway city or county next year. At the September monthly meeting of Galway County Council, local representatives voted to keep the property tax rate unchanged while city councillors passed a similar motion at their meeting a fortnight ago.
Speaking at Monday afternoon’s meeting, county council CEO Kevin Kelly outlined that the local authority could not afford to give homeowners any reduction in the LPT due to financial constraints. Mr Kelly warned councillors that the 2016 budget would be extremely difficult to frame due to rising expenditure levels. He cited examples of additional areas of spending next year including the Ballinasloe Library, Carroroe Fire Station, costs associated with the European Capital of Culture bid, and pay increases arising from the most recent public sector pay agreement.
A one per cent reduction in the property tax would cost the council €143,000 in lost income. This would result in the reduction in the LPT of only €3.15 per year for 91 per cent of homeowners in the county.
“It is going to be a much more difficult budget than last year, there will be significant pressure on the budget in the year ahead. Our income remains constant but our expenditure is continuously rising. There is no scope to reduce the property tax without this having a significant impact on expenditure. The first thing that would be cut is discretionary spending on community grants. We must remain cognisant of our financial position and the effect a reduction will have.’’
Sinn Féin councillor Gabe Cronnelly outlined how it was his party’s position to call for a 15 per cent reduction in property tax. Kevin Kelly outlined that a 15 per cent reduction would cost the council €2.5 million in lost income and would result in a yearly property tax reduction of €47 or less for 91 per cent of homeowners in Galway.
Criticism of Sinn Féin
Fine Gael representative Joe Byrne said Gabe Cronnelly calling for a 15 per cent reduction was just ‘another great soundbite from Sinn Féin’. He challenged the party to explain how exactly it proposed to cut €2.5 million in expenditure in the county over the next 12 months.
Fellow Sinn Féin representative Tom Healy admitted he did not know where the reduction would come from but said that would be up to the council’s head of finance Ger Mullarkey.
Cllr Peter Feeney said a €2.5 million reduction in income would come from discretionary spending and while everybody working in the council would get paid, it would result in the closure of public libraries, the end of community and sports grants, the removal of grants for the elderly to keep them in their own home, no funding for local road maintenance, and much more drastic spending reductions. “That is the reality of a 15 per cent cut in the property tax.”
Fianna Fáil’s Mary Hoade also agreed with leaving the property tax rate unchanged “Although we would all love to see a reduction in property tax, it would be detrimental to have to cut community and enterprise grants to do so. I am asking that going forward we request further funding from the Department of the Environment so we may be in a position to cut property tax in future.’’
Money leaving the county
Republican Sinn Féin representative Thomas O Curraoin was unhappy that a proportion of the property tax being collected was leaving the county similar to car tax. “Since I have become a councillor I have been calling for a portion of car tax to remain in the county to fund road maintenance. It is unfair that people are paying a tax that is not coming back to the area. Something needs to be done about the condition of our roads.’’
Cllr Jim Cuddy was also unhappy that the money from the LPT was leaving the county. He outlined how more than €14 million had been collected in Galway to date, but only €11 million remained in the county. “The State got nearly €3 million yet it appears there is going to be no increase in our Government grant this year despite that extra revenue being received. LPT was supposed to improve our services - which it certainly hasn’t done to date. Council staff has not increased either. Genuine people who want to make a contribution are being blackguarded. They are not getting better services. I would propose that the total amount of property tax being paid in the county is spent in the county.’’
Cllr Tim Broderick said people who were compliant with the property tax were sold ‘a pig in a poke’. “We heard all the great things that were going to be done with the money from property tax. We have seen nothing but cuts since.’’