Offaly County Council resists pressure to lower rate of Property Tax

Offaly County Council has resisted lowering its Local Property Tax by 15% despite considerable pressure to do so. The Councillors made their decision at their monthly July meeting.

Council official Mark Connolly told the meeting that the Local Property Tax issue had been discussed at length in camera the week before.

He reminded the councillors that raising, lowering or maintaining the LPT rate is a reserve function of the councillors.

He outlined the financial sum gained if the councillors agree to maintain the LPT at its current rate.

“If you maintain the LPT rate at its current rate then it will mean an extra €3.7 million for the year for the Council. I want to stress that all of this funding will go back into the communities of Offaly.”

He pointed out that when the LPT funding is added to leveraged funding (which requires community groups to find 20% in matching funding) then it results in a total investment fund of €17.5 million for projects in the county.

Mr Connolly pointed out that Offaly County Council has a deficit of €1.66 million and there is “significant uncertainty”about some of its funding streams going forward.

“Unless we get central government support,” he remarked, “then we will have a significant deficit for 2022 as well.”

He said the Council's income stream from parking fees had declined dramatically due to Covid.

He added that most government funding initiatives now require matching funding.

Mr Connolly said the fruits of LPT for the county were there for all to see.

“Because of LPT Birr got €650,000 under its tourism destination designation; Kinnitty got €735,000, which went towards historic bridges and the bike trails. In Tullamore and Edenderry significant funds have gone towards urban regeneration projects. Ferbane is seeking €2 million in regeneration funding. The benefits of the LPT are there for everyone to see on the streets of our towns and villages.

“If we were to decrease Local Property Tax by 15% then every household in the county would get 45 cents per week back.

“Whatever decision is made by the Council today it is highly likely that because of very favourable rate bands that most households in the county will fall into a lower band and therefore, in practise, will pay less LPT in the year to come.”

Mr Connolly said the Council is concerned about its deficit.

“For the first quarter of 2021 we are facing a deficit of €500,000. We are hoping central government will meet this deficit, but we haven't yet received formal notice of this. If we don't get the central government support our resources will be stretched in 2022 and LPT will be very necessary.”

He added that the Taoiseach had promised that no local authority would be worse off and that an Equalisation Fund will be administered.

In 2019 Offaly County Council decided to raise its LPT by 15%. At present there is considerable pressure on it to reduce the tax back to the baseline tax prior to the 15% increase.

Cllr Eamon Dooley told the meeting that the decision is a “no-brainer”.

Cllr Dooley said the tax makes a big difference to the three main towns as well as the smaller towns and villages.

“I propose that we keep the LPT at the same level as it has been since 2019. For 45 cent a week people are getting great value for money.”

Cllr John Leahy seconded Cllr Dooley's proposal.

“The LPT is an unfair tax,” commented Cllr Leahy, “but money is needed to fund local projects. There is a good news story in this for the people of Offaly because the streets of their towns are being regenerated and also the valuation rate bands are very favourable this year.

“Property prices have increased by 10 to 15% during Covid but in spite of that it won't affect the valuation bands in a negative way.

“I agree with Cllr Dooley that it's a no-brainer because it represents a total investment fund for the county of €17.5 million between now and 2024. It means we'll be able to get a lot of things done in the county which otherwise could not be done.”

Cllr Frank Moran said Clara and Ballycumber have benefited considerably from the proceeds of the tax.

Cllr Seán O'Brien said he opposed the LPT when it was first mooted, and he remains opposed to it. “It is not a fair tax. Any tax has to take into account the ability of people to pay. At the moment we are deducting LPT from people's pensions, from people with disabilities. There's something a bit heartless about it.”

Cllr O'Brien also criticised the matching funding concept in the country at the moment.

“Matching funding can be useful but at present every scheme seems to require matching funding. We have taken the concept to a ridiculous level.”

He criticised the Fianna Fáil group.

“Before they got into power Fianna Fáil were criticising and attacking the LPT. Now they are lauding it. It's a remarkable change around in attitude. They even backed increasing it by 15% back in 2019.”

Cllr O'Brien proposed a second motion, namely that the tax is reduced by 15% to its baseline 2019 level.

Cllr Eddie Fitzpatrick said it's hard to ignore the great amount of positive work which has been carried out by the Council because of the tax. “We all have issues with taxes being imposed on people, but unfortunately sometimes it's unavoidable because we have to find some way of being able to provide the necessary services.

“I do feel though that more of the funding accrued from the tax needs to be channelled into our villages. Birr, Tullamore and Edenderry have benefited considerably and the villages need the same amount of attention. It would be only fair. People are saying to me that they are paying LPT and road tax, but they are not seeing the expected benefits of that in rural areas.
“I think it's important to stress that we are not increasing the tax. We are retaining it at its 2019 level.

“I think we should also thank the people of Offaly for paying this tax. 95% of people in the county are paying it.” He added that since 2013 about 1200 to 1500 new houses have been built in Offaly which will mean additional funding for the Council.

Cllr Ken Smollen seconded Cllr O'Brien's proposal to reduce by 15%.

“I am completely aware how important this tax is for the Council and our ability to provide funding for projects, however I am also very conscious of struggling home owners. Food prices have gone up. Electricity prices are going up. Things are getting harder. It's wrong to be over-taxing people.”

“When you drive through Tullamore or Edenderry,” commented Cllr Liam Quinn, “you can't but see the significant improvements to the towns, all paid for by the proceeds of the LPT. The LPTis a real shot in the arm for the two towns.
“Most of our resources are stretched at the moment, and the tax is very important for us.”

Cllr John Foley said he was still against the tax in principal but could see the good it's done.

“I would like to see it spread more evenly among the villages.”

Cllr John Carroll said he is very aware of public opinion and he didn't think the public are very exercised by this issue. He added that the mechanism by which local authorities are funded needs to be reassessed.

Cllr Clare Claffey supported Cllr O'Brien's proposal.

“It isn't a fair tax. We have all gone through a tough time during Covid and I think the public want us to reduce the tax by 15%.”

Cllr Dooley said the Fianna Fáil and Fine Gael group backed raising the tax before the 2019 General Election took place.

Cllr John Clendennen asked Cllr O'Brien which projects should bite the dust if the capital funding was reduced to its baseline level? Cllr O'Brien said Cllr Clendennen's approach was synonymous with his party.

“A lot of capital projects were carried out between 2014 and 2019 using LPT funding,” Cllr O'Brien pointed out, “prior to the 15% increase.”

“Families are overstretched,” said Cllr Claffey. “There's the LPT, the USC, income tax. Enough is enough.”

Cllr Smollen said Fine Gael has changed its tune since Enda Kenny said there should not be a tax on the family home.

A vote was taken on the two proposals. The councillors voted by 16 votes to 3 to maintain the LPT at is current rate and not reduce it.