'Slash and burn' council budget to spark property tax rises, recycling charges 

Tim Lucey, Chief Executive, Cork County Council. Significant increases to property tax and recycling charges could be among the measure commmunities in Co Cork face as a result of “a substantial” income loss to the local authority. Picture: Brian Lougheeed

Significant increases to property tax, recycling charges, the killing off of community-enhancement schemes, plus major cuts to roads, footpath and public lighting programmes could face communities in Co Cork as a result of “a substantial” income loss to the local authority from Covid-19.

In addition, it's expected that grant-aid to festivals and arts groups will also be seriously reduced as will repairs to local authority houses amid a “stark” financial outlook flagged by the council's chief executive and his head of finance, as they face the prospect of an upcoming 'slash and burn' budget. Speaking exclusively to the Irish Examiner, council chief executive, Tim Lucey, said the local authority is facing a massive challenge. 

He's forecasting a minimum €19m deficit in its budget for next year and trying to make ends meet will undoubtedly result in increased charges and reduced services, even if the Government provides some financial aid to shore up its critically damaged income.

This includes a huge loss of commercial rates income, cut off to the council due to a national waiver scheme for businesses between March 27-Sept 27.

The council also lost significant revenue from pay parking, which was suspended to encourage shoppers back into towns.

Cork County Hall. Picture: Denis Minihane

Lorraine Lynch, the council's head of finance, said her officials had been informed that a number of businesses in the hospitality sector and small retailers will never reopen again.

Meanwhile, others have signalled they will not be reopening until next year, and that's dependent on how Covid-19 pans out. She said even if councillors voted for the maximum 15% increase in LPT (Local Property Tax) this would only gain them an additional €4.8m per annum, which still leaves them short €14m-plus to balance the books, and that doesn't take into account the amount of ratepayers who may default because of the economic crash.

Mr Lucey said in the first six months of this year the council made a loss of €9.9m alone and the prospect of increasing Covid-19 cases in the weeks ahead could lead to greater restrictions and further damage to its income.

He added that the council had to pay wages and pensions and is committed to interest repayments on €250m in loans it took out for major infrastructure projects with the European Investment Bank and the Council of Europe Development Bank.

Mr Lucey pointed out that these loans were signed late last year and early this year when the council was buoyed with increased income and it was prior to the economic crash caused by the pandemic.

After paying off such necessities, it will be left with a discretionary fund of less than €30m, which it will have to dramatically cut.

Such funding includes town development projects, village enhancement schemes, grants to community groups and supports for start-up businesses.