Dáil Éireann Debate, Tuesday - 11 February 2014
375. Deputy Stephen S. Donnelly asked the Minister for the Environment, Community and Local Government further to Parliamentary Question No. 108 of 6 November 2013, if it is his intention to reduce the proposed retention of local property tax receipts to below 80% to support those local authorities with weaker funding bases; and if he will make a statement on the matter. [6366/14]
View answerThe local government funding model has changed considerably in 2014. For example, the establishment of Irish Water and its financial relationship with the local government sector will have a considerable impact on local authority financing. In addition, under the Finance (Local Property Tax) Act 2012 , the Minister for Finance, from 2014 onwards, is to pay into the Local Government Fund an amount equivalent to the Local Property Tax paid into the Central Fund during that year; this will contribute to a range of financial supports being provided to local authorities, including General Purpose Grants and funding, on the basis of Service Level Agreements, for water services which local authorities will be providing on behalf of Irish Water.
The Government has indicated an intention to move to 80% retention of all Local Property Tax receipts within the local authority area where the Tax is raised. Given the significant changes to local government financing already taking place in 2014, as already outlined, it has been necessary to defer defining a certain proportion of the proceeds of the Local Property Tax to be retained in each local authority until 2015. This approach allows maximum flexibility in allocating Local Property Tax in 2014 in the form of General Purpose Grants, with a priority to support those local authorities with weaker funding bases.
The budgetary process for 2015, which will be completed in the second half of this year, will assess and manage the implications of local retention of Local Property Tax, as required. The portion of Local Property Tax that is not retained at local level will be available for re-distribution, including as support to local authorities with weaker funding bases, if necessary.
