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Cork city councilors have voted to increase the local property tax (LPT) for the first time in an attempt to maintain services.
They have also asked the central government for a bailout of local authorities in the context of a funding gap of 4 million euros caused in large part by the impact of Covid-19 on the main sources of income in the city.
The council’s executive director, Ann Doherty, had requested the maximum 15% increase in property tax in a bid to generate just over 3 million euros for the city.
But councilors voted 22 to 7 in favor of a 7.5% increase. The measure will generate around 1.58 million euros for the city.
Sinn Féin Cllr Mick Nugent, backed by independent directors Ken O’Flynn and Kieran McCarthy, led calls for a central government bailout.
O’Flynn expressed concern about raising the property tax at a time of great uncertainty for many.
Workers’ Party member Ted Tynan said the increase represents another bill on the rise for the people, and the poorest will suffer the most.
“When we hit people like this with more burdens and taxes, we are only adding fuel to the fire of poverty.”
However, Fine Gael Cllr Des Cahill said that while raising taxes at a time of great uncertainty is a difficult option, the city’s funding gap must be filled, noting that property tax revenue accounts for only 10 % of council budget.
Green Party conservative Colette Finn said cuts in services would disproportionately affect the underprivileged and said a 7.5% increase equates to an additional 61 cents a day for half of all homeowners in the city.
FF Cllr Sean Martin said the government has been very proactive in supporting various sectors, but said it was being done with borrowed money.
He said the council had to take some steps to get funding and was in favor of a modest increase.
Fianna Fáil, Fine Gael and the Green Party then voted for the proposed 7.5% increase, with the support of Labor Party John Maher and independents Ger Keohane, Kieran McCarthy and Mick Finn.
Doherty had warned that without a 15% increase, the city would have to reduce its discretionary unpaid spending by about 17%, leading to significant reductions in services by 2021.
In a report to councilors, he said that preparing the city’s budget for 2021 is proving extremely challenging in the current Covid-19 climate which, he said, is posing “unprecedented financial, environmental and social challenges” for the council. .
She said some of the city’s revenue streams, including fees and parking, have been slashed considerably, causing a ripple effect on the council’s ability to provide services.
He said the situation remains uncertain with the possibility of a second lockdown looming and this level of uncertainty will continue into 2021.
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