The decision by councillors not to lower the Local Property Tax rate in the city has come in for sharp criticism, but Monday's vote was defended by the Social Democrats' Owen Hanley, who said there were "reasons to increase LPT" in order to ensure the "State provides good services".
At Monday's city council meeting, all 18 councillors voted to keep Local Property Tax at its current rate. Councillors in each local authority in the State have the power to decide to increase or decrease the rate in their area by up to 15 per cent each year.
The vote was criticised by People Before Profit Galway's Joe Loughnane, who said the result would be "an effective increase in the tax" as the way it was calculated was about to be changed. "This is set to result in most people paying a higher level," he warned, before pointing out that the LPT makes "absolutely no consideration" of income or personal wealth.
Local authorities raise revenue from the LPT, but Mr Loughnane has alleged that the LPT has "completely failed" to increase funding for local services or "dampen the property market". "These were the two major justifications put forward by the Fine Gael/Labour government when the tax was introduced," he said. "Local authorities now have less money for local services and amenities than they had prior to the introduction of the LPT."
Mr Loughnane has called for the LPT to be abolished, and for local and public services instead to be financed through progressive central taxation, in particular by taxing "profiteers and speculators who are making obscene profits from the current housing crisis and paying almost no tax".
However, the vote was defended by Galway City East councillor, Owen Hanley. While he said there were flaws in the way the LPT is "evaluated and administered", and that the system needs to be reformed, he argued that the reason local government remained underfunded had more to do with the State being "incredibly centralised in funding and decision-making", rather than with the LPT.
"Even if it the LPT reformed tomorrow there are still structural and systemic problems with local government in this country that must be addressed to make sure we are performing the services we should be doing while getting value for money," he said.
He said until the "centralised funding and decision-making" in Dublin, the Dáil, and was Cabinet is addressed, and "until we see a strong form of local government", there would continue to be "political stagnation, inequality, and a lack of local democracy". He concluded by saying, "the LPT is just one flawed piece of rampant local government under-funding".
