Coming into the new council in May I would have instinctively favoured cutting the property tax by the maximum possible cut of 15% when that time came. However even in the short few months of council meetings since it has been very apparent that the council needs more funds to provide the basic services we all want to see in our localities. Being unable to progress roads improvements, playgrounds, flood relief schemes, taking in charge, town renewal schemes, and much more from lack of funding is a very frustrating position to be in. I remain committed to passing on the greatest possible rebate to tax payers but that has to be done in a responsible way. A view I have expressed repeatedly is that with the advent of the LPT, the council must assume a deeper obligation on service provision in return.

I am not a fan of the Property Tax and there are a great many aspects of it that I do not like. The paucity of exemptions and the lack of any “ability to pay” clause for example. However I also recognise the reality that Kildare County Council is not the Department of Finance and it can only act within the powers it actually has. And in the real world the only decision that KCC could make was whether and how much to cut the LPT by and what impact that would have in return.

The challenge, as always, is to balance the books and consider the trade-off between cutting taxes and cutting spending. Every council faces a different budgetary position and the bulk of houses in Kildare are valued for LPT purposes between 0-300K. This means the average rebate from a 15% maximum cut would have been roughly €49 per house, per year. This would have reduced council budget by about €3 million. Some Councillors, particularly Independents, cautioned against this and tabled a motion to freeze the rate (i.e. no cut at all) and invest that 3 million into local spending instead. Other groups called for the full 15% cut along with the 3 million cut from budgets that would entail.

On the day Fianna Fáil proposed a compromise position – to cut the tax by 7.5% and give people a break but with the remaining 7.5% being strictly ringfenced for spending on local projects within the municipal areas. Whilst the figure rebated is very small (average €25 per year, per house) it is a recognition of difficult times and the desire to reduce the burden on households. However the remaining 7.5% will be retained and ring fenced for local projects – for most houses the difference between the 7.5% cut and the full 15% cut would translate to about €25 per house per year but collectively it adds up to a very significant €1.5 million fund then available to fund improvements in local services.

I view this as a reasonable outcome – tax payers get a cut and there is still some monies retained for badly needed local projects. The return to individual households from a further cut would have been very small but to the council the gain or loss of those retained funds represents a major impact. We have heard so much of the ills of auction politics in recent years and I think populist or tokenistic measures should be avoided in preference for responsible governance.

It’s also worth reflecting that due to the valuation bands, the greater the tax cut given, the greater the benefit accruing to the more affluent households – with the less well-off receiving a smaller rebate but also being disproportionately dependent on local services.

I knocked a lot of doors in the election and I spoke to many people then and since about these issues. Nobody likes paying taxes and nobody likes the property tax but the one message I got loud and clear was that people really don’t like a “local” tax disappearing to Dublin and funding central government. The deal is that won’t happen this year.

The introduction of this tax was controversial and unpopular but its future can only be decided at a national level – locally the reality is that it is with us today and we have a responsibility to make sensible and prudent decisions around it. As far as I am concerned also, this is a trial run; there is a mid-year review proposed and it will be voted on again next year when the rate is set again. There is a leap of faith here between Councillors themselves, between Councillors and the electorate and between Councillors and the Council Officials whom we rely upon to actually deliver the projects we vote through. If that doesn’t happen then it’ll be a whole different ball game at the same meeting next year. But I hope we will be able to demonstrate real dividends to our communities from the retained funding.

NB: Figures produced by the Department suggested that Kildare was one of the councils that could cut the tax by up to 15% whilst still retaining a ‘surplus’. It should be noted however that ‘surplus’ is a notional one against last year’s figures which was one of the leanest budget’s in recent council history. The council budget has been slashed for six years in a row so having more than last year was still not a great place to be.

For the record here’s what I said about the LPT and public services before the election. View the full sized election canvass card here.