Cork City shortchanged by government over local property tax funding, claims councillor

Local Government Minister Darragh O’Brien has now been urged to review the increase to Cork City Council.

Cork City has been shortchanged by government, it has been claimed, after it secured just a €1.5m increase in local property tax (LPT) baseline funding — the bare minimum allowed.

Local Government Minister Darragh O’Brien has now been urged to review the increase to Cork City Council which Fine Gael Cllr Shane O’Callaghan said appears to have disregarded the fact that the city council is the only local authority in the country facing a multi-million annual compensation payout arising out of a boundary extension.

As part of the 2019 boundary extension deal, it was agreed that the city would pay at least €13m in inflation-linked compensation to Cork County Council annually for the next six years.

Soaring inflation means next year's compensation bill will hit €15m.

Mr O’Callaghan said the LTP top-up won’t even cover the €2m increase in compensation, let alone maintain or fund additional services.

“It means the city will be down millions over the coming years — millions that it won’t be able to spend on services like road and footpath resurfacing, housing maintenance, or traffic calming,” he said.

“The city's compensation issue clearly wasn't taken into consideration by Minister O'Brien when he was making the decision. But there's still time for him to reconsider.” 

Baseline funding

Mr O’Brien announced the allocation as part of a €75.4m increase in LPT baseline funding to all 31 local authorities.

Every council gets a minimum, or baseline, amount of funding from LPT which is then supplemented by exchequer funding where its LPT income is lower than its baseline because of variances in LPT yield across the country.

A complex formula that considers population, geographic area, deprivation levels, local authority income-raising capacity, and national policy priorities is then used to adjust the baseline with increased funding to maintain services.

Some local authorities got a greater increase in the baseline funding than others but all 31 will see their baseline increase by a minimum of €1.5m in 2024.

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Cork City Council, along with Dublin City, Galway, Kerry, Kildare, Kilkenny, Limerick, Leitrim, Longford, Louth, Mayo, Monaghan, Tipperary, Waterford, and Westmeath, got the minimum €1.5m increase. But Cork County Council secured the largest increase at just over €10m.

Mr O’Callaghan will seek council support at its October meeting for calls to Mr O’Brien to reconsider the city’s allocation.