Urban taxpayers subsidising rural homeowners could cause property tax backlash

The scale at which urban property taxpayers are subsidising rural ones could provoke a renewed backlash against the levy, Government TDs have warned.

Concern was raised when a survey showed that while Dublin was allocated €5.06 per person via the local government fund, and Cork (city and county) €7.38 per person, the figures per head for Monaghan and Leitrim were €169.43, and €260.47 respectively.

The survey, conducted by Dublin City Council’s finance department, has focused the spotlight back onto delays in implementing a Government pledge that 80% of property tax revenues would be used in the area in which they are collected.

The local government fund is mainly comprised of property tax receipts and is distributed to authorities from a central pool.

Environment Minister Phil Hogan has already put back the start date for 80% of the tax take to remain local by a year, until 2015, and TDs have warned against any further slippage.

Mr Hogan defended the delay as he claimed he wanted to ensure that no authority suffered due to the massive transfer of resources to Irish Water from the local government fund to cover start-up costs.

The survey found that while Waterford City was allocated €94.14 per head, Limerick City received €147.97 per person.

Labour TD Joanna Tuffy warned urban areas are losing out, but rural councils have less ability to garner funds via other means.

“It is not just confined to Dublin, it’s urban areas, places like Cork, that are losing out.

“But you are not comparing like with like as urban areas have other opportunities to raise funds.

“The whole point of the local property tax, the way it was argued — I suppose to get people to buy into it — was that there would be a local democratic element.

“Long term, if it’s to be a proper local tax, there has to be more equality between urban areas,” Ms Tuffy told Newstalk Breakfast.

Sinn Féin local government spokesperson Brian Stanley said the figures proved central funding was being misused, but warned it was unfair to compare urban and rural areas on a per person allocation basis.

“It now transpires the local property tax is almost entirely being used to subvent Irish Water.

“On top of that, all local authorities are once again, for successive years, having their allocation from it slashed. “In 2013 less than 60% of the Local Government Fund went for the purposes for which it is intended.

“I also reject the spin that some counties are benefiting at the expense of Dublin.

“It is claimed that Leitrim will receive just over €260 per person in 2014 from the LGF. Even if that is true, it still represents a cut of almost €4m in Leitrim County Council’s allocation from the Local Government Fund in 2013,” he said.