The call has been made by Cork Chamber in response to a comment by county manager Martin Riordan that he may have to introduce a rates hike next year as the cash-strappedlocal authority isn’t getting the financial support it needs from the Government to allow it balance its books.
Cork Chamber chief executive Conor Healy said the Government must introduce a proper “funding model for local government to reduce dependence on business-related charges and guarantee that revenue from the Local Property Tax (LPT) will be fairly distributed to local authorities and spent at a local level.”
Mr Riordan said uncertainty over the percentage of LPT which would be paid out to councils and the ever decreasing grant from the Local Government Fund might leave him with no opportunity but to increase rates to balance next year’s Cork County Council budget.
Mr Riordan hasn’t increased rates in the past five years, acknowledging that businesses were finding it tough during the economic downturn. However, he said this might have to change when he presents his 2014 budget to councillors in December.
“The Government must ensure that local authorities are appropriately funded and that dependence on rates funding is reduced. Commercial rates remain one of the most substantial fixed costs for businesses and for many years it has been the business community that has shouldered the responsibility for funding local services through the rates system,” Mr Healy said.
“The LPT has now been introduced and must result in a fairer and more equitable system. What we need to see is the extra revenue being raised though the LPT being placed in the Local Government Fund and leading to targeted reductions in commercial rates.
“A proportion of the LPT income should be ring-fenced for local services and local development needs. It is imperative that savings achieved through local government reform are passed to those within the business community that have experienced the harshest consequences of the economic downturn”.
He believes that local authority charges must fall to reflect current activity levels in the economy and assist struggling businesses.
“Rising business costs are threatening the competitiveness of business and local jobs. Businesses cannot continue to be taxed at the current levels. Instead they must be supported as much as possible so that they can continue to contribute to the economic recovery and provide much needed employment.”