County councillors gobsmacked as rates write down leaves €750,000 hole in their finances

It has been labelled the worst news that Galway County Councill has received in a long time. Local representatives have expressed their disgust following an announcement by Council CEO Kevin Kelly that there will be a €750,000 reduction in the council’s rates income for 2016, which will adversely affect the local authority’s upcoming budget. The reduction is due to The Valuation Office reducing the value of a number of properties in the county used by utility companies, therefore reducing the rates bill of these companies. 

Rates are calculated by multiplying the Annual Rate on Valuation [as determined by Galway County Council], by the valuation on the property, as determined by The Valuation Office. Therefore if the value of a property decreases, this lowers the rates bill.

Kevin Kelly said the announcement, which is affecting every local authority in the country, was extremely significant, taking another large chunk out of the council’s budget for 2016. “It means we have to look at less expenditure in certain areas and on certain services next year.”

Sinn Féin councillor Tom Healy labelled the move by The Valuation Office as disgraceful, while Independent representative Jim Cuddy said the revelation of the CEO was very disturbing. “My understanding is there will be no increase in the Local Government grant this year. Where is the Property Tax going, because it certainly is not going into local services. Have the executive demanded extra money from the department or do we just lie down and take what is given to us? The Corporation Tax returns are way ahead of target, why isn’t some of that money coming to council? The Executive need to get on to the Department and outline the money being provided is not sufficient. It is not putting people first.”

Councillor Jimmy McClearn said this move was indefensible. “It is now getting to the stage where it is impossible to come up with any kind of respectable budget. Are we going to try and explain to people that because of a decision that we did not ask for, that we can’t fix your local road.”

Independent Tom Welby said he was shocked to hear of the figure that had been outlined by the CEO and queried what companies were getting this reduction. “It is reported that Eir spent €12 million on rebranding, it is no wonder it can pay that if it is getting a rates write down. This is not on, this announcement is coming now at such a late stage. Talk about kicking the local authorities in the teeth. Who is getting the sweetheart deal? Is this just another ploy to make Irish Water look profitable?” .

CEO Kevin Kelly outlined that Irish Water was exempt from rates.

Ardrahan councillor Michael Fahy requested that a motion be sent to the Minister outlining that Galway County Council cannot accept a reduction in funding for 2016. “If we go out and say to the people of Galway that services are going to be neglected because of this, people will be completely up in arms. We won’t just need double doors to prevent people getting in here [to the council chamber]. The county’s roads are crying out for an injection of money, not a reduction.”

Councillor Fahy’s motion was seconded by Fianna Fail’s Micheal Connolly who commented that the county council’s roads budget is on par with its budget in 1997 despite the level of inflation that has occured since.

Councillor James Charity said the pattern in relation to the local authority’s budget in recent years was very clear. “In 2008 we had an annual budget of €160 million, that has now been reduced to just €104 million in 2015. There is €34 million being collected in this county in Motor Tax and not one penny of it is being spent in the county.

We also have a situation where 20 per cent of our Property Tax revenue is being handed back to central funding. Are rates going to have to be increased to cover this funding shortfall? That is something we cannot support.’’                                                                                           Fine Gael’s Peter Feeney said the news was an absolute body blow to a council that has very little discretionary funding. “It is probably the worst news we’ve received in a long time, at probably the worst time. We will be taking our concerns to the powers that be, and making them known at the highest level.”                                                                                   

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