Hot on the heels of Galway county councillors raising local taxes last month, a meeting of city representatives this week was expected to do the same, but disagreement means crunch decisions have been postponed.
Galway County Councillors voted by 32 to 6 to increase Local Property Tax by 15 per cent in late September, a hike calculated to net an extra €2.4 million income per year for the local authority from 2025.
Meanwhile a special council meeting in City Hall scheduled for Monday last week was adjourned for two weeks as the ruling ‘pact’ of Fianna Fáil, Labour, Sinn Féin and Independent city councillors failed to agree a strategy for Galway City Council raising Local Property Tax rates for the first time in 11 years.
Mayor Peter Keane (FF ), seconded by Councillor Declan McDonnell (Ind ), adjourned the meeting of all 18 councillors until October 14 to give members more time to consider LPT issues.
Under the 2012 Finance Act, councillors may “adjust” this tax by a maximum plus or minus 15 per cent, with the maximum possible raise calculated to bring in an extra €1.5 million annually for Galway city. Galway City Council spends €120 million to run Galway annually, and the city manager may apply for low interest government loans using property tax as collateral.
At a pre-meeting, closed-door discussion of ruling pact councillors, described as occasionally “acrimonious and emotional” by one participant, councillors thrashed out their thoughts on tax. Unusually for a local authority ruling pact, the current coalition in City Hall is understood not to have included tax as an agreed policy platform when it coalesced after the elections in May.
City Mayor Peter Keane has been forthright in championing a 15 per cent raise in LPT, a move he calculates will cost households less than one euro per week. He argues that with almost 90 per cent of city households paying less than €300 per year, this hike will cost almost €40 to most household annual budgets, netting more than €6 million over the life of the current council to allocate to local projects.
“Now is the time to make a brave political decision to provide amenities for our children,” he said. “We can increase sports funding, open community centres for seven days per week, and take more [housing] estates in charge. At the moment we are able to only give [small amounts] of funding to things like the film society or Baboró – it’s embarrassing.”
Keane’s party colleague Alan Cheevers described the Pact’s private meeting as fiery. “I am not voting for tax raises now. Galway City’s delivery of housing and maintenance over the last number of years has been absolutely appalling. I’ve no confidence that suddenly an LPT increase will guarantee delivery of projects,” he said.
Labour Party councillor John McDonagh declined to be described as ‘on the fence’ when it comes to changing the LPT rate. “I’m still examining it. I understand [raising tax] can support more local projects, but I am talking to my party colleagues and those close to me. I’ve not made my mind up yet,” he said. Similarly Councillor Josie Forde (FF ) is undecided. She said she is against a 15 per cent increase. She proposed a 7.5 per cent increase, but is “most likely” to vote against any tax hike.
Fianna Fáil’s John Connolly is understood to be against an LPT raise. Labour’s Níall McNelis says the Pact has questions for City chief executive Leonard Cleary, but that he is for a “wealth tax” as “the way Galway city is funded is a joke. If we are asking Dublin for more funding, we have to show we are raising it here too”.
In the past, pact member Councillor Mike Cubbard (Ind ) has been vociferous in his opposition to raising local taxes. Sinn Féin party policy is opposed to LPT as a tax on the family home, so fellow pact member Councillor Aisling Buke is unlikely to vote for a raise. Councillors Ogbu (Lab ) and McDonnell were unavailable for comment.
Sources in City Hall suggest it is the “optics” of a tax raise that is focusing minds amongst council members, especially as - so far – two councillors have announced their candidacy for a general election expected next month – John Connolly (FF ) and Clodagh Higgins (FG ) - with at least one more councillor expected to throw his hat in the ring soon. Having to fend off charges of voting for tax raises during a cost of living crunch may seem unpalatable.
Outside the ruling pact, Fine Gael members appear divided on tax issues, while the Social Democrats are understood to have a “wish list” of projects required for their two votes.
