The spectacle of councillors falling over each other to secure reductions in Local Property Tax (LPT) on behalf of constituents has been unedifying, to say the least. Under the legislation that introduced this tax at the behest of the troika, local authorities may apply a maximum discount of 15 per cent, and that’s what Dublin’s four councils have done for the second year in succession, despite being told by their chief executives that it will result in less money being available to fund public services.
In the case of Dublin City Council, which voted 47-12 in favour of the cut, the consequential shortfall in revenue for 2016 will amount to more than €11 million. Chief executive Owen Keegan told councillors that he needed the money for libraries, footpaths, pedestrian crossings, commemorations marking the centenary of the Easter Rising, and other budget items. "I consider it timely that the city council should approve a service investment programme, funded through the application of the basic LPT rate," he said.
But Fine Gael, Fianna Fáil and Sinn Féin all tabled motions calling for the full 15 per cent "discount", while Labour was prepared to settle for a 7.5 per cent cut, and only the Greens responded positively to Mr Keegan's plea, arguing, in the words of Cllr Ciarán Cuffe, that "we have to raise taxes to pay for the quality of services we want."
Fingal, South Dublin and Dún Laoghaire-Rathdown councils had already voted overwhelmingly in favour of cutting the standard rate of LPT by 15 per cent. What this means, in effect, is that a house valued in May 2013 at €325,000 is liable for a tax of €497.25 instead of €585, while a house valued at €675,000 will cost its owners €1,032.75 instead of the full rate of €1,215.
With a general election looming, such politically inspired discounts may win some kudos at the doorsteps, but it is absolutely clear that local authorities will be left with even fewer discretionary spending options in 2016 as a result of this shameless populism. And Dublin will be the poorer for it.