The commercial rates might not increase in 2011, but unless the rates are actually reduced, many Galway city businesses could be forced to close next year.
This is the warning from Michael Coyle, the CEO of the Galway Chamber of Commerce, who said businesses are struggling to pay the commercial rate as it stands, especially in today’s harsh economic climate.
He has also called for closer co-operation between the Galway city and county council, saying that sharing and pooling resources will provide savings and make the local authorities less reliant of money from the rates.
At Monday’s city council meeting, councillors will vote to accept or reject the Galway City Council’s Draft Budget 2011. The budget proposes no hike in the rate this year. The rate will remain at 66.12 per cent, which city manager Joe O’Neill says is “one of the lowest rates in the largest urban areas in the country”.
However the Galway Chamber of Commerce has been calling for the rates to be decreased by 10 per cent this year to take account of the effects of the recession over the past year and the fact that businesses are struggling to make ends meet in the current economic climate.
“The economic condition has worsened greatly since last year,” Michael Coyle told the Galway Advertiser. “Business is the only sector that pays rates but now they are also enduring wage cuts, staff cuts, pay freezes, and are struggling to stay afloat.”
Mr Coyle said there are c3-4,000 rate payers in Galway and that they account for one-third of the €85 million which goes to make up the council budget.
“These are not big businesses, these are small and medium enterprises,” he said. “It’s not that businesses don’t want to pay rates, it’s that they can’t. They are having to look at their finances and say I can keep this person/take a person on, or I can pay the rates.”
The Chamber of Commerce will be meeting with the various political groupings on the council today to discuss the rates. According to Labour councillor Billy Cameron, Labour will be looking to see if the rate can be lowered by one per cent or 0.5 per cent.
However Cllr Cameron said that creating such a saving in one area will leads to cuts having to be made in another part of the budget.
“It’s a big ask for people that could be hit by some service having to be withdrawn by making this saving,” he said, “yet a lot of businesses in Galway are in difficulty and jobs could be lost if there isn’t a reduction.”
However Mr Coyle believes that services would not have to be affected if the city and county councils pool their resources effectively.
“This does not have to mean the two bodies joining together, but instead it would involve a sharing of resources and services,” he said. “They could merge their functions in planning, finance, HR, and with innovation and creativity, they could reduce their dependancy on rates.”
Mr Coyle says that in lowering rates and forging close co-operation, the Galway city and county council could set an example which other local authorities could follow, measures which he feels would help businesses and set the agenda for the development of local government in the future.
“Galway can take a lead in this, so can Galway be brave enough to do it?” he asked. “Lowering the rates will help businesses and enable them to continue existing. It’s business, small, indigenous, businesses that are ones who create jobs and are the ones who will help get Ireland out of the difficulties it is in.”