Dáil Éireann Debate, Tuesday - 8 April 2014
354. Deputy Kevin Humphreys asked the Minister for the Environment, Community and Local Government if local authorities will receive 80% of the local property tax collected in their areas in 2015; and if he will make a statement on the matter. [16579/14]
View answer355. Deputy Kevin Humphreys asked the Minister for the Environment, Community and Local Government if his Department and the Revenue Commissioners engaged in discussions regarding the way any specific local authority will vary the rate of local property tax in their area; if each local authority will receive 80% of the LPT raised in their area; the way it is envisioned that local authorities will draw up their budgets and any proposed rate reduction if they are not aware of the specific allocations they will receive from the proceeds of the LPT for 2015 remitted to the local government fund; and if he will make a statement on the matter. [16582/14]
View answer392. Deputy Kevin Humphreys asked the Minister for the Environment, Community and Local Government if his Department engaged in discussions with the Revenue Commissioners and the Department of Finance regarding any specific local authority will vary the rate of local property tax in their area; if his Department indicated to each local authority that they will receive 80% of the LPT raised in their area and specifically the amount for the fiscal year 2015; the way it is envisioned that local authorities will draw up their budgets and any proposed rate reduction if they are not aware of the specific allocations they will receive from the proceeds of the LPT for 2015 remitted to the local government fund; and if he will make a statement on the matter. [16583/14]
View answerI propose to take Questions Nos. 354, 355 and 392 together.
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. This year t he estab lishment of Irish Water presents local government with significant organisa tional and financial challenges. Service provision responsibilities are moving from the local authorities to Irish Water, infrastructure is being transferred, financing arrangements have altered and local authorities are operating on behalf of Irish Water under Service Level Agreements. These changes must be managed. In this context, it was necessary to defer defining a certain proportion of the proceeds of the Local Property Tax to be retained in each local authority for 2014. I expect the Local Property Tax to have multiple benefits, including a more sustainable and resilient system of funding for local authorities and, therefore, a sounder financial footing for the provision of essential local services; greater local scope for financial decision-making concerning service provision; and a strengthening of democracy at local level with a more active relationship between local authorities and local electorates. A stronger democratic relationship and clearer lines of accountability can only have a beneficial impact on service provision from the perspective of the service user.
Under section 20 of the Finance (Local Property Tax) Act 2012, a local authority may, as a reserved function, and subject to any Regulations made under the section, resolve to vary the rate of the Local Property Tax (LPT) within its functional area by a maximum of +/- 15%. This power will be available to local authorities effective from 2015, as the relevant sections of the Act will come into operation on 1 July 2014 . The inclusion of this local variation mechanism from 2015 will further increase the autonomy of local authorities. The Revenue Commissioners must be notified no later than 30 September 2014 of the details of any decision made in respect o f the l ocal adjustment factor for 2015 and I understand that Revenue reminded local authorities of this requirement recently. I also understand that the Revenue Commissioners released details of the levels of LPT collected in local authority areas in 2013 earlier this year, which should provide a useful information source for local authorities; it is available at http://www.revenue.ie/en/press/2014/pr-180214-lpt-household-charge.html .
The changes being made to the current local government funding model, are significant and it is essential that the impacts are fully assessed and that the effect on overall Exchequer funding is managed appropriately. My Department will continue to engage with all relevant Departments and Agencies in this regard. There will be changes to the 2015 budget process for local authorities arising from EU obligations, which will require local authorities to prepare draft budget strategies by the end of September 2014. My Department will continue to work with local authorities to ensure that they have an appropriate level of information, including in relation to LPT retention, to facilitate this deadline being achieved.
