Galway County Council votes not to increase Property Tax

Councillors have agreed not to increase the Local Property Tax (LPT) this year ahead of the budget meetings in November – despite a projected €1.25 million shortfall for Galway Council Council.

Councillors can vote to vary the basic rate of the Local Property Tax up or down by 15 per cent and have to take the decision by the end of September so it can come into effect by November 1. The maximum value of an increase or decrease would be €2.2m.

The LPT collected for next year would be an estimated €14.7m, of which €11.7m would be retained by the Council with the remainder going into an equalisation fund benefiting other councils with smaller populations.

The estimated expenditure for 2020 will be €7.6m more than this year. That includes a €5m hike in the roads budget, €1.4m extra for staff costs and €300,000 more for homeless services. Other increased areas for expenditure are €200,000 for housing maintenance and €200,000 for local roads.

Chief Executive of Galway County Kevin Kelly warned that despite a projected increase in income of €6.4m – €5m of that from higher roads grants from the department – that still left a shortfall of €1.25m.

This would have to be met through increased LPT and/or commercial rates – or by reducing expenditure.

A 15 per cent hike in the LPT would mean an increased bill of €13.50 for 36 per cent of households, €34 jump for 32 per cent and €47 extra for 22 per cent of homes per year.

A five per cent adjustment would mean an additional cost of less than 30 cents per week for 90 per cent of households in County Galway while giving €725,000 to the Council – “very significant in terms of service delivery”.

“Galway County Council had a budget of €160m in 2008. The Council’s budget reduced to €105m in the period 2015-2017 before increasing to €112m in 2018 and €120m in 2019,” Mr Kelly stated in a submission to councillors.

“The members will be aware that we do not compare favourably with relevant comparable counties which are those with a large geographical area and a significant rural population.

“In comparison with such counties, Galway has the highest population, lowest staff level, lowest budget per capita and the lowest commercial rates income of these comparable counties.”

Martina Kinane (FF) said the answer to bridging the gap was not by increasing LPT and she proposed that the rate would remain the same next year, which was seconded by Cllr Joe Byrne (FG).

“Since 2015 we have 5,000 houses newly built in the last 6-7 years and they don’t pay property tax – that €225 per year would net Galway County Council €1.4m which is actually the difference to balance the budget,” stated Cllr Byrne.

Cllr Mary Hoade (FF) urged Fine Gael councillors to seek a meeting with the Finance Minister to lobby for more money to address the serious underfunding in this local authority.

Cllr Michael Connolly (FF) seconded this, pointing out that Galway County Council was getting €2.8-3m in the equalisation fund while Mayo was getting €13m, Tipperary €19, and Donegal €21m.”

The motion not to increase the LPT was agreed unanimously.