Cork County Council bosses have warned they may have to curtail some services and grants after councillors voted not to increase the Local Property Tax (LPT).
The move will result in a large deficit in the annual budget for next year.
Lorraine Lynch, the council's head of finance, painted a grim picture of the council's finances and what is likely to be faced when they hold their annual budget meeting on November 8.
Ms Lynch estimates council income will be €344m, with expenditure at €363m, and said the one way to make up the shortfall was for a maximum increase in the LPT.
She pointed out that last year the council had to dip into its reserves to the tune of €4.1m to balance its budget and had just €3m left in that account.
Ms Lynch also pointed out that there is likely to be more bad debt in respect of rates payments due to the Covid-19 pandemic's impact on business.
She warned that the deficit facing the council could lead to cuts in discretionary funding, such as arts and heritage grants, town and village renewal schemes and playground maintenance/building among others.
Mayor of Co Cork, Fianna Fáil councillor Gillian Coughlan, said they were aware of the deficit, but many people have had their income slashed and proposed they retained the status quo.
Fine Gael councillor Gerard Murphy said he regretted that “Fianna Fáil and their allies" would not bite the bullet because increasing the LPT would help many voluntary groups and provide much-needed grants for the elderly and the disabled.
He was referring to the political arrangement on the council of Fianna Fáil, Independents, and Labour, which forms the majority.
“It's important that the general public realise this,” Mr Murphy added.
Fianna Fáil councillor Seamus McGrath pointed out that 90% of householders won't pay more as a result of the government changes in the LPT bands.
“As a party we strongly believe we shouldn't ask people to pay more,” he said, but admitted difficult decisions would have to be taken when councillors discuss their budget later in the year.
Fine Gael leader on the council John Paul O'Shea, said as Fianna Fáil were “running the council” it was up to them to make LPT proposals.
Council chief executive Tim Lucey said he and his senior officials were recommending an increase, otherwise they would “face some challenging times to adopt a balanced budget” and in doing so, it's likely to be at the expense of some services.
He said increasing the LPT “provides us the best opportunity to deliver the maximum set of services we can”.
The proposal not to increase the LPT rate — which comes into effect for a year from November 21 — was passed by 47 votes to one.