Cork City Council passes 7.5% increase in local property tax 

Cork City Council passes 7.5% increase in local property tax 

Cork City council voted to increase local property tax for the first time. Picture Dan Linehan cork city hall generic stock

Cork's city councillors have voted to increase the local property tax (LPT) for the first time in a bid to maintain services.

They have also called on central government for a local authority bailout against the backdrop of a €4m funding gap caused largely by Covid-19 hitting the city's key income streams.

Council chief executive, Ann Doherty, had requested the maximum 15% increase in the property tax in a bid to generate just over €3m for the city.

But councillors voted 22 to 7 in favour of a 7.5% increase. The move will generate around €1.58m for the city.

Sinn Féin Cllr Mick Nugent, backed by Independent Cllrs Ken O'Flynn and Kieran McCarthy, led calls for a bailout from central government.

Mr O'Flynn expressed concern about raising the property tax at a time of great uncertainty for so many.

"Fuel to the fire"

Worker's Party Cllr Ted Tynan said the hike represents yet another rising bill for people, saying the poorest will suffer most.

"When we hit people like that with more charges and taxes, we are only adding fuel to the fire of poverty."

However, Fine Gael Cllr Des Cahill said while increasing taxes at a time of huge uncertainty is a difficult choice, the city's funding gap must be bridged, pointing out that property tax income represents just 10% of the council's budget.

Green Party Cllr Colette Finn said cuts to services would disproportionately affect the less well-off and said a 7.5% increase equates to an extra 61c a day for half of all homeowners in the city.

FF Cllr Sean Martin said the government has been very proactive in supporting various sectors but he said it was being done with borrowed money.

He said the council had to take some steps towards raising finance and he was in favour of a modest increase.

Fianna Fáil, Fine Gael, and the Green Party then voted for the proposed 7.5% increase, with support from Labour Cllr John Maher, and Independents Ger Keohane, Kieran McCarthy and Mick Finn.

Ms Doherty had warned that without an increase of 15%, the city would have to reduce its discretionary non-pay spend by around 17%, leading to significant reductions in services for 2021.

In a report to councillors, she said the preparation of the city’s 2021 budget is proving to be extremely challenging in the current Covid-19 climate which she said is posing “unprecedented financial, environmental and social challenges” for the council.

She said some of the city’s income sources, including rates and parking, have been greatly reduced, causing a knock-on effect on the council’s ability to provide services.

She said the situation remains uncertain with the possibility of second lockdown looming and this level of uncertainty continuing into 2021.

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