‘Temporary’ rate rise to remain until 2020

The temporary commercial rates increase that came into effect this year, has been ‘regularised’ for 2017 and will remain in place for three further years after that.

Businesses, in conjunction with Galway City Council management, proposed a 3% hike in commercial rates effective in 2016 – it was to provide extra cash to bid for European Capital of Culture.

The rate was to reduce to 2015 levels if the bid was not successful but it will now remain in place until at least 2020, the year of the prestigious designation.

City Council Chief Executive Brendan McGrath said the extra rates yields roughly €750,000 per annum. It will be ring-fenced, he said, to deliver on Galway 2020’s programme of events.

Mr McGrath praised businesses for almost universally accepting the hike payable in 2016. He said it influenced the Capital of Culture judges.

“I’ve had one letter from one rate-payer (complaining) and that was it. That was proposed a year ago, and came in for the current year and the Chamber of Commerce supported it.

“The jury acknowledged big time in the written report and also at the presentational, what the business community had done, and that they had agreed to and proposed a rate increase themselves. It genuinely was a very significant factor in swinging the thing for Galway,” he said.

As well as keeping commercial rates static, Mr McGrath confirmed next Monday’s Council budget 2017 proposed no increase in Local Property Tax. The budget also proposes a freeze on charges for services provided directly by the Council, such as planning applications, cost of burial plots, and admission charges to the likes of Leisureland.

Mr McGrath said in the current climate, the Council would like to introduce an expansionary budget but it doesn’t have the cash.

“We spend €75 million next year running Galway. Back in 2009, that was about €92 million. Of that €75 million, about 85% of it is collected locally, through rates, property tax and the charges for services we provide.

“We’re heavily dependent on those local sources of income, much more so than other local authorities. Because we’re not increasing rates, property tax or charges it means that the income side of the budget is largely fixed.

“The only increase in income we had in the last three years was the 3% on the rates for capital of culture. If income is fixed, it means the amount of money you have to spend is equally fixed,” he said.

Mr McGrath said the Council’s collection of rates owed has increased in the past three years from about 66% to an anticipated 75% this year, which was reflective of improvement in the wider economy.

For more, read this week’s Galway City Tribune.