Dublin City Councillors have voted to lower Local Property Tax again despite concerns services may have to be cut to fill a hole in the budget.
The combination of inflation and rising energy costs is set to leave a €50 million gap in Dublin City Council's budget. Ireland's rate of inflation hit 9.1% in July - the highest level in 38 years - and energy customers were hit by price hikes this past weekend largely due to the Russian war in Ukraine.
Next year will be the first year that all of the LPT collected from Dublin will be given to DCC. Previously, the local authority only retained 80% of the revenue with 20% of it being spent in other local authorities across the country.
Read more: Budget calculator 2023: How income tax changes will affect you
However, Housing Minister Darragh O'Brien has directed DCC to spend 83% more - up from €30 million to €54 million - of their LPT revenue on capital projects in 2023 which was usually funded from central Government grants. Fine Gael Group leader James Geoghegan slammed Minister O'Brien for the "total sham" of a policy change.
He said: "This is a sleight of hand of the worst sort by the Minister and it needs to change if this government decision is going to be honoured. What the government promised to give back to our capital city with their left hand, the Minister has taken with his right.”
Despite fears of services being cut, councillors voted to reduce the tax rate. Fine Gael, People Before Profit Sinn Fein and Fianna Fail all voted in favour of the cut while Labour, the Greens and the Social Democrats voted to keep the rate at its base level.
The total in favour of the 15% reduction was 38 with 23 against the reduction. Councillors have always voted to reduce the rate.
Fianna Fail Group leader Deirdre Heney told the meeting the LPT "still remains a very unfair tax on Dublin people who have to pay more property tax than most other counties" and criticised the directive for DCC to use more of their LPT revenue to fund capital projects.
Green Party Councillor Janet Horner said they wanted to maintain the base rate in order to maintain the services for those who "desperately need" them.
Labour leader Dermot Lacey said: "The reality is that a collective Government decision was taken to play games with the people of Dublin and withhold some funding from us on the pretence that we were going to be able to keep the full Local Property Tax."
A report compiled by DCC's Chief Executive Owen Keegan recommended getting rid of the 15% reduction and increasing the LPT rate by an additional 15% due to raise almost €30 million to address the hole in the budget.
He wrote: "In view of the estimated funding gap of €46m to €50m primarily due to increasing demands for services, pay inflation, the impact of both energy / general inflation on the cost base and the primary objective of continuing with the current level of service provision that the Elected Members move from applying a 15% reduction in the LPT basic rate to applying a 15% increase to the national basic rate thereby providing an estimated €28.4m in additional funds."
Dublin Live previously reported on the €116.8 million DCC claim the HSE owe them for running Dublin's ambulance service.
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