Tonight the majority of Dublin City Councillors voted to reduce the local property tax to be paid by households in the Dublin City are by 15%. I did not support this reduction, neither did my Labour colleagues. We proposed a more balanced 7.5% reduction. Here’s why:
Dublin City Budget
Each year the Dublin City Council has to agree a budget which must take into consideration the amount of money available to it to spend. Neither the total amount of money available to the Council nor the extent of services required is known at present. However, what is known is that we have a severe homelessness crisis (Dublin City Council provides financial support towards homeless services), that our local street cleaning and maintenance services are now provided on a less frequent basis and less money available to build and enhance local playgrounds and recreational amenities. In addition to this Dublin City Council staff numbers have been reduced in an effort to reduce costs. The knock on effect of this is that it takes longer for staff to get things done because they are doing more with less human resources. Therefore, in a case where not all the variables are known and services have already been curtailed, I believe it is best exercise a measure of caution unlike previous occasions (remember the night of the bank guarantee???).
Giving something back
It is in the gift of Dublin City Councillors to reduce or increase the local property tax by up to 15%. Your property tax is calculated against the value of your house, therefore, the more your house is valued the more property tax you pay. For example:
- if your house is valued between €100,000 and €150,000 your local property tax is set at €225
- if your house is valued at between €200,000 and €250,000 your local property tax is set at €405
- if your house is valued at between €300,000 and €350,000 your local property tax is set at €585
- if your house is valued at between €400,000 and €450,000 your local property tax is set at €765
- if your house is valued at between €500,000 and €550,000 your local property tax is set at €945
Therefore, a 15% reduction would return most to those who pay most. Given that there is a strong correlation between the value of someone’s house and their ability to pay (with the exception of those who previously were high earners but have lost their jobs) those who have higher incomes benefit most from a higher property tax reduction:
- A 15% reduction to those who pay €225 will return a total of €33.75 or 65 cent per week.
- A 7.5% reduction to those who pay €225 will return a total of €16.88 or 32 cent per week.
- A 15% reduction to those who pay €945 will return a total of €141.75 or €2.73 per week.
- A 7.5% reduction to those who pay €945 will return a total of €70.88 or €1.36 cent per week.
Fairness and equity
I would much prefer had the legislation governing local property tax allowed for a flat rate increase or decrease. This would be fairer. Returning €100 to each household would benefit those on the lowest incomes.
While I agree that the lowest earners in our community find paying bills the hardest, I believe that when it comes to providing local, and indeed public, services we get more benefit from pooling our money collectively. This is why myself and my Labour colleagues rejected the full 15% reduction or just over €12m and proposed a 7.5% reduction. This would retain just over €6m and return just over €6m to households. To put this amount in perspective, the Dublin region is facing at least a €6m homeless budget shortfall in 2014 due to the rising numbers of people needing Emergency Accommodation. Or, alternatively, this €6m would just about pay for a street cleansing package of 10 additional litter wardens, one annual city wide junk collection and an increase in street sweeping from once every 3 months to once every month.
Our proposal, had it been successful, would have given a small amount back to each household but would have better protected local services, particular to those who are most vulnerable.
The debate on the various proposals was cut short tonight and one composite motion proposing a reduction of 15% was proposed and agreed by the majority of councillors in the Chamber. I had sought to speak but was not given the opportunity. Had I had the opportunity this is what I would have said:
Tonight my colleagues and I in Labour could have chosen to play the populist political game, passing the buck of providing adequate funding to this council on to central government and proposed a 15% reduction in our local property tax. However, instead we chose to take a balanced responsible lead, proposing a mid-way reduction of 7.5%, a return equivalent to just over €6m to Dublin City Council area households.
We have all been elected to make decisions on behalf of the people of the City of Dublin, to take responsibility and not to pass that responsibility on, and indeed pass on the blame when it’s convenient, to others who may or may not provide. I take that responsibility very seriously. This is why I support better protecting our local services rather than returning the maximum advantage to the most affluent.
I don’t disagree that those on lower incomes need particular support, however, we must bear in mind our responsibility to protect local services as best we can. How often have we heard that our streets cannot be cleaned more frequently or the grass on our community pitches cut more frequently due to insufficient funds? How often have we heard that new play grounds and recreational amenities cannot be built due to insufficient funds? Cutting a full €12m out of our Dublin City Council budget will continue with this situation.
Aside from reduced local services and an inability to adequately support homeless persons, a further concern I have is the potential impact these cuts will have on our local authority jobs. Such a significant cut promotes outsourcing in an attempt to make efficiencies when local authorities struggle to balance books on a reduced income. Those who advocate for workers’ rights and decent should bear this in mind in our debate here this evening.
Therefore, I urge you colleagues to take a more responsible and balanced approach, an approach that provides some alleviation to each household AND better protects our local services.