Galway city is facing into its harshest budget in more than 20 years and there are fears it will include a hike in the commercial rates - coming at a time when city businesses least need them.
This week Dublin City Council increased its commercial rates by 3.3 per cent, a move which has angered retailers in the capital. However councillors here fear Galway could be in for a similar hike - or higher - when the Galway City Council meets to discuss and decide its budget on Monday December 8.
Fears that the commercial rate in Galway will increase by three per cent or more have arisen following a substantial cut in the Local Government Fund to the city council. The fund received by City Hall last year was €9,795,964 but this year it will be €9,124,005 - a drop of 6.9 per cent and a loss of €67,1959.
The shortfall will have to be made up somehow if City Hall is to maintain services for the coming year. As such, councillors now suspect that a hike in the commercial rates is on the cards.
Fine Gael Cllr Brian Walsh believes that if the rate is increased, it could match Dublin’s 3.3 per cent or go “even higher”. He acknowledges that, the council faces “a challenge to find the money”, but does not believe that hitting business is the way to do it.
“With the economic downturn this is now a difficult business environment,” he told the Galway First. “The Government has short-changed us and that is going to be passed onto the ratepayer.”
Cllr Walsh is not in favour of a rate increase but thinks it will be inevitable.
“We have to accept that Government funding is cut but we will have to minimise its effects as much as possible by seeing what we can take from other areas,” he said. “We have to keep any rate increase to a minimum. We managed to do this in previous budgets.”
However the Galway Chamber of Commerce is calling on the council to “put jobs first” by not increasing the commercial rates in the upcoming budget.
According to chamber president Paul Shelly, ratepayers in Galway currently contribute €30 million in rates to the city council’s funding and a further €2.75 million in water charges and other business levies.
“Businesses can no longer absorb increases in these charges and to stay in business they will seek to reduce costs by implementing pay freezes and cutting jobs,” he said. “The city council must protect jobs in Galway by examining closely every euro of cost it spends and where possible implement initiatives that will reduce the burden of charges on business at this time.”
Chamber chief executive Michael Coyle said it was time the council “recognised the difficult conditions that face Galway businesses”. He said consumer confidence is low and this has led to severe cash flow problems.
“Add to this the additional charges and levies introduced by Government in the recent Budget and high rental levels in the retail sector and you have a recipe for business closures and job losses.”
