A 7.5% increase in the Cork County’s Local Property Tax (LPT) has been carried at County Hall, an increase of 2.5% on last year.
Fine Gael called for a 7.5% increase along with the Green Party. The proposal was carried a substantive motion, where two votes, one for 0% increase and one for 5% increase were defeated.
The 0% motion was defeated by 28 against, 10 for and two abstentions. The 5% motion was defeated by 23 against, 15 for and 11 abstentions.
This 7.5% increase will cost homeowners between €2.25 in band one (homes valued up to €100,000) and €16 in band six (homes valued over €300,000).
Cork County Council’s Head of Finance Lorraine Lynch said there was a €19m shortfall predicted for the 2021 budget, which she said was ‘optimistic.’ County Hall executives also warned there could be a deficit of €15m this year, which will eat into the county reserves of €7m.
Cork County Council’s Chief Executive Tim Lucey said it was not likely that the council would have any reserves to bring into play in 2021.
The Head of Finance urged the council to vote for a 15% increase in order to maintain the level of services provided over the last few years.
The LPT can be increased or decreased by 15% annually, with the decision made by vote from the elected councillors. 80% of the tax stays with the local authority with 20% used in what is called an equalisation fund, to top-up authorities with lower LPT bases.
Fine Gael Leader John Paul O’Shea called for the immediate end to the equalisation fund.
Fianna Fáil looked to keep the LPT at 5%, which would be the same as last year, with a solid commitment on where that money will be spent.
Independent spokesperson, Councillor Declan Hurley said the independents were of the view that no increase should be introduced.
“No matter what way you dress this up, this is an increase and given the year we have had, can’t feel like adding to people’s expenses.” Labour Party spokesperson Cathal Rasmussen said he was always uncomfortable with the decision around the Local Property Tax and supported Mr Hurley in his proposal for no increase.
“On one side the executive wants to increase the LPT, but at the same time, we have no control over how that money is being spent and the householder is being asked to increase spend at a difficult time.” Green Party leader Alan O’Connor said there was a lot to consider in relation to the decision being made.
“The budget is still to come, we will be looking at expenditure, the tax itself, fair or otherwise.”
Mr O’Connor said: “Considering that we have a large funding gap and we need to provide services, an increase is warranted. Considering all aspects, and the city council increased the tax to 7.5% last week, I think we should do the same.”
The Green Party Councillor also said that in line with Fine Gael Councillor O’Shea he would support the stipulation that a portion of the money should be ring-fenced for community resources.
The elected council discussed the matter for two hours, at which point County Mayor Mary Linehan Foley called a recess for 15 minutes, under Covid guidelines, in order to give people a chance to get some air.
After the recess, Chief Executive Tim Lucey spoke to the councillors regarding comments made during the meeting.
Mr Lucey said he “wholeheartedly rejected” commentary that the members have not been listened to over the years and agreed to the Fine Gael stipulation that monies raised from a 7.5% increase would be ringfenced for community funding, such as General Municipal Allocations, Town Development and Village Enhancement Scheme.
The Chief Executive said €3.6m was needed for the three community schemes and a 7.5% increase would bring in a total of 2.4m, which could be safeguarded for the fund.
Mr Lucey also said the executive would prefer a 15% increase, however, he acknowledged, “Any increase is better than none.”