Members of the political pact running the Galway City Council were split when it came to raising Local Property Tax in October, but differences were put aside last week when it voted for a 2025 budget including two tax hikes.
In a crunch meeting last Friday, barely 48 hours before a statutory deadline, councillors voted to adopt a €143m city budget including a 15 per cent increase for homeowners paying LPT, and a 6 per cent hike in commercial rates for businesses.
If a 2025 budget was not adopted by midnight last Sunday, December 14, the Minister for Local Government had the option to sack all 18 city councillors, replace them with unelected technocrats commissioned to balance the city’s books, and order a repeat local election in 12 months.
A 15 per cent increase in the Annual Rate on Valuation (ARV ) for businesses recommended by city officials was diluted by Pact members to 6 per cent, reducing the city’s expenditure plans from €147m to €143m. The governing pact is made up of Fianna Fáil, Labour, and Sinn Féin councillors, alongside independents Declan McDonnell, and Mike Cubbard, who proposed the 2025 budget for adoption.
Galway businesses’ ARV of 0.217 will now become 0.23, a figure “beginning to catch up with the majority of the 30 other local authorities across the country” according to a statement posted on the authority’s website.
Speaking after the city council’s third contentious budget meeting in a fortnight, non-Pact member Terry O’Flaherty (Ind ) expressed disdain for some councillors’ online comments.
“My beef is that some councillors didn’t vote for an LPT raise in October – and they’re entitled to do that – but then they go on social media straight after and demand that councillors that did vote [for it] should be ‘named and shamed’ publicly. Then they turn around and vote for this budget including tax increases... make of that what you will.”
The six per cent rise is the first increase in commercial rates in eight years. Levied on 3,200 local businesses, this increase is expected to net almost €5m.
The ARV was last increased by three per cent in 2016, a measure to restore tax cuts awarded in the austerity years after the 2008 recession. Owners of empty commercial properties will now have to pay full taxes in 2025, after a 30 per cent vacancy rebate was removed from the budget, saving city coffers an estimated €800,000.
The 15 per cent in LPT is Galway city’s first increase in the decade since the tax was introduced; it should net an extra €7m.
Overall, civic investment is set to increase by more than €19m next year. This will include targeted expenditure on the delivery of social and affordable housing, dereliction, new climate action projects, public realm improvements, community grants, and camper van facilities.
However officials raised concerns that raising the ARV by just six per cent means money from financial reserves funded by development levies earmarked for capital investment will now instead be funnelled to private consultants tasked with progressing area masterplans for Renmore, South Park and Kingston.
After councillors adopted an amended budget last week, City accountants must now submit the municipal balance sheet to central government by December 29. It is expected that some community grants, sports capital funding and sinking funds put aside for ongoing expenses will be cut to reflect a six per cent ARV rise, rather than the recommended 15 per cent.
In a statement, city manager Leonard Cleary welcomed the 2025 budget adoption by elected members.
“Significant investment is required in aging infrastructure such as our public lighting, public conveniences, footpaths and housing stock. Rising operational costs driven by inflation, wage increases and the rise in energy costs, obligations in meeting sustainability targets and the increased demand for services posed by population growth add to the challenging tasks that the Council must contend with,” he said.
