Cork county faces major service cuts after property tax increase of just 2.5%

Increase in Local Property Tax equates to less than €1m for the county council at a time when it is facing a massive budget deficit of €19.1m

At the Cork County Council meeting, Labour and Independents proposed no increase in LPT. Picture: Larry Cummins

Cork county councillors' decision to increase the Local Property Tax by just 2.5% will mean the county now faces significant cuts to a number of essential services.

That increase equates to less than €1m for the county council at a time when it is facing a massive budget deficit of €19.1m.

Council chief executive Tim Lucey and director of finance Lorraine Lynch both sought a 15% increase in LPT to help them to cut the deficit. That would have brought in €4.8m, but instead, a motion from Fine Gael councillors was adopted to increase it by just 2.5%. This will raise only €800,000 for the severely cash-strapped local authority.

The severity of the cuts facing councillors when they finalise their budget on November 23 was outlined by Mr Lucey. He has ordered his directors of services for roads, environment, economic development and others to reduce their non-payroll expenditure by at least 14%.

He said the council's financial reserves are “facing a wipeout” and pointed out significant income has been lost by the decision of municipal district councils to suspend pay parking charges indefinitely to help businesses recovering from the effects of the Covid-19 pandemic.

We're looking at significant impacts in some services. Some hard decisions will have to be made.

He and Ms Lynch said the budget deficit could be even worse than they'd predicted, especially if the county is hit by a stage three lockdown. She added many ratepayers may not be able to pay the money they owe.

“We need to maximise the areas of income we have under our control and I'd urge all council members to vote for a 15% increase,” she said.

Fine Gael leader on the council, councillor John Paul O'Shea, successfully proposed a 2.5% increase. Last week, the city council adopted a 7.5% increase.

In Kerry, a 7.5% increase has been agreed. The council there is facing a shortfall of €10.6m, a combination of €7.5m in rates loss alongside a €3.1m downturn in parking, planning, rents and other matters.

At the Cork County Council meeting, Labour and Independents proposed no increase in LPT.

“The government should be giving us the resources to provide our services,” spokesman for the Independents councillor Declan Hurley said.

In total 83% of Co Cork households fall into the lowest three LPT bands.

The 2.5% increase means those with properties valued between €100,000 - €150,000 will pay just €2.25 more next year. Homes worth €150,000 - €200,000 will be taxed an extra €5.50 and those between €200,000 - €250,000 will pay €8 more.

At the top end of the scale, homes valued at €900,000 - €1m, will pay an additional €44.