Oireachtas Joint and Select Committees
Wednesday, 9 May 2018
Joint Oireachtas Committee on Housing, Planning and Local Government
Review of Local Property Tax: Discussion
We are back in public session. At the request of the broadcasting and recording service, members, witnesses and visitors are requested to ensure that their mobile phones are switched off completely or placed in aeroplane, safe or flight mode for the duration of the meeting. It is not enough to put one's phone on silent mode because this will maintain a level of interference with the broadcasting system.
The purpose of this meeting is to discuss the review of the local property tax, LPT. On behalf of the committee, I welcome Councillors Ruairí McGinley and Paddy McCartan from Dublin City Council's finance strategic policy committee, SPC. Councillor Ciarán Cuffe, also of Dublin City Council, will be joining us shortly. I also welcome Ms Kathy Quinn. Finally, from PMCA Economic Consulting, I welcome Dr. Pat McCloughan.
Before we begin, I draw the attention of the witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, they protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
Mr. Ruairí McGinley:
I thank the Chair. On behalf of the finance SPC, I welcome this opportunity to present to the Joint Oireachtas Committee on Housing, Planning and Local Government. I thank the Chairperson, members and secretariat for facilitating this presentation.
The issue of the LPT is a topical one and the finance SPC commissioned a study by Dr. Pat McCloughan, who joins us today, on the topic. This study covers much of the same ground as that covered in the report of the Committee on Budgetary Oversight on LPT revaluation published in March. However, there is significant additionality in the report commissioned by the finance SPC.
Our SPC took the terms of reference set by Minister for Finance and left aside arguments regarding the actual tax or possible alternatives to it. Our key focus was on the legitimacy of the tax as perceived by the electorate in the context of local elections and on the changes we see as desirable. In 2013, people were promised additional services that have not been forthcoming. Dublin City Council's net benefit from LPT is €4 million. To put that in context, Dublin City Council's total budget is €900 million, while €80 million is collected per annum through the LPT in its area. In effect, just 5% of the money paid by Dublin City Council households has been made available to fund new services. A key concern is that LPT receipts have been substituted for previously used tax revenues but that practice is only applied in the Dublin city area and other major cities. The true level of equalisation applied via the LPT is distorted and is far removed from what the electorate understands it to be.
Dublin City Council applies the maximum 15% discount every year. This flows directly from the electoral mandate of councillors in 2014 and reflects the opinion of the electorate. The CEO and some political parties, most notably the Green Party and the Labour Party, have sought to reduce the 15% discount on the basis of generating additional funds for services.
In terms of the legitimacy of the tax, two factors must be considered.
The two main factors affecting legitimacy of tax is the lack of local resourcing - that is the local spend from the tax - and the fact that 20% of the money collected flows by way of equalisation to other counties in what is seen to be an arbitrary and obscure fashion. Dublin City Council collected an additional €2 million last year but our income went down by €160,000, which was slightly difficult. This may give the committee an idea of the arbitrary nature of the distribution.
There is also a concern among the electorate that the local property tax, LPT, could become a tax on certain residential postal districts and that this tendency will increase in future. If people have a long enough memory it brings them back to the residential property tax of the 1990s. There is also disquiet around the lack of direct correlation between movements in property valuation and income, although the tax implies there is a correlation. The LPT framework, as structured, embeds the inequity between the living costs of similarly paid workers in the capital city Dublin, for example, as against rural Ireland. This perception could cause our capital to be avoided as a place to live.
One of the key points is the need for the removal of equalisation. In the past poorer local authorities were subsidised when we were in financial straitened circumstances, but now the removal of equalisation would be a positive step forward in making the tax easier to understand and in achieving tax efficiency. National government should fund this aspect of local government funding.
Dublin City Council contains some of the more affluent areas of the State and also some of the most socially disadvantaged areas. This is visible in areas of Dublin city centre where there are some 100 flat complexes alongside areas of affluence.
The progressive nature of the tax is dealt with in our report as is the high rate of compliance. The high rate of compliance leads the committee to believe that the tax will remain in place for the future. Removing the current exemptions, particularly for new builds, will increase the level of resources available for local government. We calculate that this measure has cost Dublin City Council more than €10 million to date.
Resources are still very scarce as can be seen by the condition of footpaths and road surfaces in the capital city. These spending areas were reduced by more than 80% during the financial crisis and they have yet to recover to levels needed for sustainable renewal programmes.
The area of deferral arrangements also needs to be looked at. The deferral arrangements were included in the context of a short life for the tax, foreseen as a period of three years. This does not really correlate to where we are now and there is a need for a general review. There are issues of people on low income living in valuable properties. Low income can be associated with ageing and also with disabilities, situations that do not distinguish between people living in small or large houses.
We agree with the recommendation that a revaluation takes place and that a valuation factor would be adjusted. This means that if the property prices have doubled, the current evaluation factor of .18 would need to be halved to .09. We have seen property price increases of more than 100%; they have nearly doubled since the low point of 2012. The tax should be fair to the greatest degree possible and the consultation process - which we are part of today - should be transparent.
Our committee operates on a cross-party basis politically and the report reflects the views of the members. I shall conclude with some figures to put Dublin City Council's LPT funding in context: Dublin City Council is 12% of the number of houses covered by LPT; it provides 16.5% of the money raised through LPT; and 42% of the money raised by Dublin City Council in LPT comes from properties that are worth more than €300,000. We would see the value of exemptions forgone as a very significant figure.
I thank the Chairman and I am happy to take any questions that committee members might have.
I thank Councillor McGinley for the very detailed presentation and documentation supplied. I shall make a comment rather than put a question. There are occasions when something is so badly designed and so unfit for purpose that trying to tinker around the edges will not solve the fundamental problem. I am as convinced today as I was when this tax was first introduced that the LPT is not fit for purpose and it needs to be scrapped. We need to go back to the drawing board for a more appropriate way of funding local government services.
There is much misperception in the public and media debates about the local property tax. It is important to restate the reasons why some of us are very opposed to it in principle. The idea of a charge that pays no attention to ability to pay is wrong. The councillors have already cited the people who are asset rich and income poor, especially older people or pensioners with larger properties in more affluent parts of the city, who might be on very small occupational pensions. Any reform of local government taxation that does not take into account the ability to pay will not work.
While there are fewer people now in negative equity than when this tax was introduced, the tax is on debt as well as on an asset. I am not aware of anywhere else in the world where a property tax taxes debt. Any reform of any reasonable property tax would have to take that into account in a way that this LPT does not.
There are small features of the tax that some people do not realise. Households whose incomes are too low to pay the charge may defer the tax, but they are charged an additional 4% annually. This is bizarre. I am sure that all members are aware of cases, usually of older people or people who are just above the income thresholds, that simply cannot pay the tax. Their deferred payment is mounting up and accumulating the 4% debt annually.
I have huge sympathy for the councillors. I sat on South Dublin County Council when we had to deal with this and we lost euro for euro. For every euro in local property tax that was generated the council lost a euro in central government funding. At a time when people were paying more for their local services, and therefore expecting more from the council and the councillors, they were getting exactly the same services or less, depending on how the fund worked out. That has created huge resentment and anger among the local public directed towards councillors and council officials and staff, when it is not actually the responsibility or the fault of those people.
Fundamentally, the LPT was not introduced as a tax to try to fund or improve the financing of local government. This was not the purpose of the LPT. This tax was introduced at the time to assist the Government in closing its fiscal deficit. For all of those reasons it would be my preference to draw a line in the sand to say the tax does not work. We need an honest conversation about funding local government. If we continue to be solely reliant on or simply revert to 100% central government funding and grants for housing and roads supplemented by business rates, this is not a good model either. I am a little worried, not by the councillors' presentations, but by the Government just having a review of the local property tax. It is stopping us from having the bigger discussion around the longer term funding. I lived in Belfast for 11 years, and while I am not saying its rates system is perfect at least people there can see a broad range or basket of regional and local services that they get for the tax that they pay. This aspect needs to be reformed.
I have huge sympathy with the council. We need to return to this issue in our programme at a later stage. I am, however as convinced as I was before that the LPT is not reformable, it needs to be scrapped and we need to start over again.
Mr. Ruairí McGinley:
On the legitimacy of the tax, if there is a move towards a local council tax as against a local property tax, and the Deputy touched on the issue slightly, alongside the funding it is also about the powers and services that are delivered. There is scope to deliver on both fronts. In the real politick world the local property tax raises €500 million, which is not an inconsiderable sum. The committee adhered to the terms of reference with regard to what is before us in 2019, but it is a practical concern. There are more general issues that are complicated and need to be worked through.
I welcome Councillor McGinley, who I know well. I acknowledge his work on this issue.
I have never made a secret of the fact that I am in favour of a local council tax. We need to be clear and we need to be honest. Local services must be paid for and somebody has to pay for them. I am of the view that everybody must pay some percentage. We are aware that social housing tenants pay no local property tax at any rate. I do not believe that this is correct or fair. I do not suggest that they should pay the same, but it should be related to a person's income and situation. If we are to reform the local property tax we need to call it what it is; it is a council tax.
To be an effective and fair council tax, 100% of it should be retained by the local authorities. It should be no less than that. According to the figures in the report to which Councillor McGinley referred, people were promised additional services. That is true, but we have not seen them. He mentioned that Dublin City Council's net benefit from the local property tax was €4 million in the context of a €900 million budget and the collection of €80 million in LPT per annum. In effect, just 5% of the moneys paid by Dublin householders has been made available to fund new services in Dublin. That tells its own story.
I go back to the tax. It is important to carry out a review. We have heard suggestions in the media in the last week that the Government is considering reviewing this. Politicians are in the business of politics and they are conscious of local elections next year. There is a great deal of resistance to paying any tax. No one likes paying taxes. While there is a high rate of compliance with the tax because Revenue collects it, that compliance would not be there if the local authority were collecting it. Where Revenue comes on heavily and people receive a brown envelope with a harp on it referring to money owed, people comply. That is the reality of it.
Where are we going from here? There are three things. I refer to recommendations Nos. 8 to 10, inclusive, of the Thornhill review, in particular recommendation No. 9. Recommendation No. 9 states that, over the medium term, the Government should consider moving to a system whereby local authorities retain 100% of the LPT revenue raised in their areas. That is very important. I congratulate PMCA Economic Consulting for its submission, which was a very comprehensive one. It refers to a gradual transition from a local property tax to a council local tax, or CLT. That is the model. If we are going to have proper reform of local government, greater powers must be devolved to city and county councillors. They need to determine how this money is spent and they must be accountable to the people for it. I cited to some people before I came to the meeting that in the borough of Greenwich in the greater London area residents receive a pie chart setting out how their council taxes are paid. Steps are taken in the case of a shortfall. For example, library services were closed for four Saturdays last December because they were over-budget. That is communicated to the electorate. It was stated that the library service was shut for four Saturdays to bring it back into line with its budget. That is responsible budgeting and responsible local government.
I welcome this as the beginning of a debate. I am not sure we will see any reform in the next 12 months given the political sensitivities around local government elections and the numbers game in Leinster House. However, we need to have a public conversation and consultation. We need public engagement. It is right and proper to have a local council tax and we should not apologise for that. People have to be given assurances, however, and they must see services provided. I had a look only today at the literature that was originally put through my door saying there would be new swimming pools, new libraries, new beaches and new community centres, etc., as a result of this tax. There was a huge PR exercise around this tax, but none of that has happened and people are disappointed. Everyone must pay pro rataor on the basis of their incomes. They should pay something, including those who live in local authority or housing association houses. We need greater accountability from local authorities and they must be able to make real decisions. Where local authorities are permitted to reduce their tax by 15%, they will do it. If they could reduce it by 50%, they would do that too. As such, we have to make the connection between this tax and local government services. Elected members must be able to hold their local authority executive to account for the spending of this money and engage publicly and regularly with communities as to where it is going.
Dr. Pat McCloughan:
The report outlines the points the Senator makes. It is a fact that there is a very high rate of compliance with the council tax. The Senator may have seen in the report that the IMF commented recently that the fiscal situation in this country is quite centralised and that local authorities had a very low share of fiscal activity. Deputy Ó Broin is correct that the tax was introduced at a time of fiscal emergency. During that time, a greater onus was placed on local authorities to work on economic development, to encourage foreign direct investment and to help Irish-owned companies. Their fiscal contribution has not increased as a result, however. I take the Senator's well-made point, which reflects what we say in the report. It is worth remarking that Dublin is special in that it is the capital city and its residents have a legitimate expectation. It is also the case that tens of thousands of commuters come into the capital every day and footpaths and local services have to work for them too. Dublin is also the largest tourism centre in the country and, by a long shot, the largest centre of employment. The jobs-population ratio is over 50%. Dublin does a great deal of the heavy lifting economically. That applies across the local authority sector and the Senator's points in that regard were well made.
Ms Kathy Quinn:
I emphasise the point about the 5%. While €80 million is collected in any one year in local property tax, €4 million is provided, keeping it at 5%. Dublin is an extreme case by comparison with other local authorities. Members may have seen in the report that 20% was taken off. There was a reduction as applied by the members. As to the balance, what happens with Dublin City Council is that it is assumed we can self-fund. Grants previously brought in from the Exchequer are substituted with the local property tax. That issue only affects Dublin city. I draw members' attention to that. Equalisation is one piece, but that is another. I take Dr. McCloughan's point. The report discusses the disparity in communities within Dublin city where one has very rich and affluent communities and others which are not. That type of funding is very important to provide for community-building processes and measures regarding the social fabric to reduce the disparity over time. That flow just has not occurred but it is very important to the city.
I thank Councillor McGinley for his presentation this morning. I go back a bit in time to my attendance at the launch of the "Putting People First" document at Dublin Castle. I was intrigued by it because I thought power was being given back to local authorities. I thought councillors were being given the power to make the decisions and to spend the money. I have to give Phil Hogan credit for selling this tax very well. He sold it as a new income stream for local authorities but did not quite tell the public that it was replacing the local government fund. That was the first annoying thing.
When one goes through the process, one realises that one loses 20% for the equalisation fund. The one thing that was probably not mentioned in the discussion here so far is the hugely disappointing fact that the baseline figure has not been renewed in most local authorities for over 20 years. While we can agree or disagree on the 20% equalisation fund, in the third year of it in my county, the stronger areas were trying to keep their property tax. Whether we like it or not, there is a benefit in the equalisation fund where the strong can help to support the weak. If we had done that in Wicklow, Greystones would have had a song and a dance every night of the week while other parts of the county suffered. We can justify the equalisation fund from that point of view. My argument is about the baseline. Counties in which the population has grown to a huge extent have not seen an acknowledgement and accounting for that. Additional services are required to keep pace with that growth in population. The argument for local authorities should be on the baseline figure. We need to put up a very strong argument for a comprehensive review, which is where we can get the money back in to allow local democracy to work in relation to spending decisions.
In County Wicklow 50% of our money is gone through equalisation and because of the baseline. The figure is probably even higher in Dublin City Council. The discretionary fund is just a joke that we are leaving for councillors. I notice that in a number of contributions it was said we should move towards having a council tax. Perhaps that is the way we should go. If we move back to property valuations, it was a blunt tax based purely on property values. In my area I know low income families who are located in a very scenic part of County Wicklow. Their properties have a huge value but their incomes are low. Their ability to pay has to be taken into account. Equally, I am concerned that when we look at the way the commercial rates system works, one can go 20 to 30 years without a revaluation and then be hit with a huge increase. We are beginning to go down the same road, unless there is some revaluation now, rather than kicking the can down the road. We cannot just go for a property-based revaluation, as otherwise people will be hit with increases of 100% or 200% in their property tax, with no services coming with them.
Mr. Paddy McCartan:
I am reminded by what Deputy Pat Casey said that I have been around for long enough to remember the abolition of domestic rates in 1977, which is part of the reason for some of the problems we face today. Going back to the genesis of the local property tax after the crash in 2008 and looking at its contribution to the total tax take, it only accounts for 1% of tax revenue. It is a minimalist tax. I have looked at property taxes in other jurisdictions. There is no doubt that, in effect, it only replaces the local government fund. It is very hard to explain to constituents - certainly those who expect local services to be improved, which has not been the case - that, of the amount taken in, what is left over is €4 million.
On the relative price stability required, I think Dr. Pat McCloughan will agree with me that if we do not do something about the tax base, people will be paying double what they were paying in 2013. In one way, it is fortunate that it was introduced in 2013 because, in effect, it was the lowest valuation this century. It is galling for councillors to see the equalisation fund going to what would be regarded as relatively wealthy counties, including Tipperary, Mayo and Donegal. That is a major issue for councillors and is a reason we have opted to reduce the tax by 15% every year. Essentially, we are asking what is the point and saying we might as well give our constituents the benefits of it.
Another point I want to make which I brought up with Ms Kathy Quinn concerns the loss of revenue to Dublin City Council in respect of new builds since 2013 which has been quite considerable. We worked out figures because it does not apply to any apartment built since 2013. On a cumulative basis, if this were to continue until 2019, the loss for Dublin City Council would be €15 million. We also worked out figures for the other three local authorities, which would also add up to approximately €15 million. Therefore, for the four Dublin local authorities, we are talking about a loss of €30 million as a result of not dealing with this issue. It is vital that it be dealt with. In my electoral area apartments are being built in Ballsbridge, including penthouses that cost €6.5 million. We have worked out that the figure would be between €16,000 and €18,000 a year if full local property tax was to be paid, but no local property tax will be paid on these very extravagant and expensive properties. That issue has to be addressed immediately.
We are talking about where the local property tax fund goes. Senator Victor Boyhan and I worked on many budgets together. The discretionary figure in Dún Laoghaire is approximately €2.5 million and one is then talking about reducing commercial rates. When one receives the final figures, it is too late in the process and there are all of these complications. There are many very experienced councillors, including the delegates. While I know my area and a few others well, we cannot lose sight of the fact that approximately €21 million of the money goes into housing grants. There is transparency on where the local property tax fund goes in certain areas. We have some fantastic parks and public amenities in Dún Laoghaire which I do not think anybody can doubt. While I know that Deputy Eoin Ó Broin did not mean it, remarks about scrapping the local property tax are not helpful. It is a little like scrapping the water tax. Look at where we are now. One still has to pay for a service, it is a matter of how one pays for it. On the local property tax, Deputy Pat Casey is dead right; it is about the baseline which needs to be looked at again. We talk about projects that have been finished since 2013. They have to pay their way. We have to re-evaluate the process.
Whether we call it a local property tax, a council tax or whatever else, in general, people do not mind paying for a service when they see it. We have a job to do to remind them of where the money goes. As the economy is recovering, there is a ripe opportunity to restructure the local property tax, but I do not believe there is an appetite in any party, although I can only speak for my own, to increase it or the burden on any family. As was said, there are many asset-rich homes, on which very little income is coming in. We need to be very cognisant of this when we look at any re-evaluation of the system. Senator Victor Boyhan is dead right that the principle of paying for services and seeing what one is paying for is a good one. If we scrap anything, with what will we replace it? One has to pay for services in some shape or form. At least, there is transparency when it comes to the local property tax. People can log on to any local authority website and see exactly where the local property tax fund goes. Whether one agrees or disagrees with it, there is a transparent process.
There is a figure of €21 million in Dún Laoghaire. I want it to be focused on the provision of capital funding for affordable housing, for which we are pressing, and the rent to buy scheme, for which we are also pressing and which I hope other local authorities will look, to give first-time buyers living in rental accommodation an opportunity to purchase and offset what they have paid in rent against the cost of purchasing that affordable home from the local authority. That is what I want to see the local property tax fund really targeting - those who need it the most, as well as people who use services.
I do not really have questions as such. Are there one or two ways by which the delegates would change the system to make it better? What comments do they have to make on scrapping the charge? Do they believe that would be reckless?
Mr. Ruairí McGinley:
At committee level, we accepted the mandate to accept the local property tax. I would prefer not to comment on it because different political parties have their views. By and large, the reality is that the funding is now available and the general feeling is it has a certain legitimacy.
The first proposal we made was for an independent appraisal of local authority needs and resources and hence the validity of the baseline funding model for local authorities, which has been mentioned a few times. That appraisal needs to be conducted at an early opportunity.
It must be done within the lifetime of the valuation and before the next one is signed.
In order to do the budgets in November 2019, which has been mentioned, we need to know our income and ensure we have a budgetary consultative committee. In fairness, local authorities have the opportunity to make an input. It is the one reserved function. Councillors, on a cross-party basis, take an interest although it is unseen. A big value is placed on these posts. The Chairman asked why would anybody want to be elected to a local authority? It is because we can exercise a limited level power, which comes through money.
In terms of the baseline funding review, it is to consider the financing arrangements for local government more generally. The financial landscape has changed from being an emergency. I take issue, slightly, with what has been said by Councillor McCartan. I acknowledge that Donegal is a poor county so I am not surprised that it needs some money but the national government should decide. The idea that one takes an existing situation, and Sligo County Council might be the nearest thing we have to a bankrupt local authority, but we need the national government to decide rather than tinkering at the edges. We have known about this matter for a long time as there have been cases for the past 20 years. This is not a newsflash and I have been around long enough to know about some of those things.
There are eight recommendations in our report and they have been fairly and practically drawn up. Whether it is through this committee or through the officials and various working groups, this work is relatively urgent. People are very conscious of the tax. There are development opportunities for local government into the future. Councillor McCartan was correct to draw our attention to 1978 and to a legitimate tax. My parents paid domestic rates which they did not like but they understood what services would be provided. Our bins were collected and there was a direct correlation between paying and getting a service. We need to return to that situation. Again, Councillor McCartan touched on the matter, the local authority sector must stand up for itself even though it is the smallest in Europe. Outside of Russia, this country has the most centralised form of local democracy. I can safely say that it is more centralised in Ireland than in Russia because Russians think they would not get away with it. The people in the Custom House are really the permanent government, and there is a permanent government. Their view is they are trying to administer local government in Dublin city from their base in Custom House and that is an unhealthy democratic base going forward.
First, I ask Councillor McGinley to convey our thanks to the council and its finance committee.
I have a few questions for Dr. McCloughan about the PMCA economic consultant report. How can we progress the nine recommendations listed on the back of the report? What has Councillor McGinley and his group done about them? The report was commissioned and it echoes many of the Thornhill recommendations. It is important that we, as a committee, analyse the progress made with the nine recommendations on another occasion. The report is a bit Dublin-centric but that is understandable because Councillor McGinley works for Dublin City Council. I appreciate that fact and I am very happy to make a case for Dublin City Council. Councillor McGinley has made a very good case in his presentation and also in this report. I ask him to share with us where Dublin City Council intends going and at what high level in the department. I believe Mr. Owen Keegan, Chief Executive, Dublin City Council is a very able and capable and I do not think he will be quiet or found wanting. How does Dublin City Council intend to proceed? How can we, as a committee, further its aims and objectives?
Mr. Ruairí McGinley:
We recognise the realpolitik and this is a live issue. I am sure the Chairman has his own opinion but we have a Minister for Housing, Planning and Local Government who happens to share an electoral area with my colleague who is seated on my right and, indeed, with myself. To understand the Dublin piece, the areas outside of Dublin are well represented. Councillor McCartan touched on the area of Wicklow. There are representatives all over the country, there are members for Tipperary and all of these places but Dublin has to stand up for itself and we believe that a national system is fair. We need the Minister and senior Government officials to take this aspect onboard. We, as a local authority, do not have the capacity but we are happy to make ourselves available. I am happy to provide time, I am sure my city council's finance officer is also willing to do so and we are happy to make Dr. McCloughan available. Dublin City Council has a certain level of resources by virtue of being the largest local authority and we take our finances seriously, across all the various political groupings. We work on behalf of people to deliver services, and we do not waste money and apply it where needed. There are needs and we are dealing with a major homelessness crisis, which is one of the things that is evident on our streets. Our constituents expect us to do something to tackle homelessness. Members will be glad to hear that when I went to houses and knocked on doors I heard more about the housing crisis than about the local property tax. In other words, the tax is not the first item that people are concerned about but it is one of their top five concerns. Two major concerns are housing and homelessness. In order to mobilise resources we need more joined up thinking and I would like there to be less separation between Custom House and City Hall.
In terms of the other local authorities, I mean Dún Laoghaire and the four local authorities in Dublin, I get the piece about the adjoining counties and the baseline. I live in Lucan and I am conscious that there has been major growth in Kildare and west Dublin. Things are changing and there is a dynamism so people expect us and the political system to respond.
Councillor McGinley, the Chairman and Senator Boyhan mentioned the following. In terms of the timing of the decision of the property tax in early October or whenever, while Dublin City Council and most of the Dublin authorities are in a position to give a 15% or whatever discount, other counties struggle at that time. It is when one is trying to decide how much of a discount should be applied to the local property tax or whether to raise it that one should identify the budget. Some political parties have run away from making a decision and took the easy option of calling for a decrease. The people who make the tough decision are left to carry the can even though the budget process is not for another five or six weeks. When it comes to the budget process, it is the people who earlier voted against the property tax that want to spend it. Do the witnesses believe we can harmonise the process? Do they believe the processes should become one process?
Mr. Ruairí McGinley:
The officials would like that. Our CEO would be very active in presenting reports to the first meeting. The political imperative in this council term, which runs until summer 2018, has been, for the reasons that we have outlined, to keep to less than 15%. That view is shared across all of the political groupings, including Sinn Féin. From left to right, a significant majority have said so. We have issues in squaring up the budget and we try to be responsible. Clearly, we are foregoing certain ideas that the CEO would like to achieve.
In terms of the budget, a certain level of buoyancy has come back into the economy and, as a result, our income has increased year-on-year, which is healthy. Equally, the ravages of the recession are real and I mean in terms of the condition of footpaths, which is a subject that I have touched on. The condition of footpaths is probably the most mentioned issue to me. When I go anywhere, and I am sure it is the same for other councillors, people will tell me to please take a look at the footpath outside of people's houses.
In terms of projects, it varies from local authority to local authority. We do what we think is feasible. There are other political views. As I have mentioned here, the Labour Party, and the Green Party, in particular, consistently challenge us each year. The CEO also consistently challenges us. There are quite detailed reports on this so it is not just a "by the way" decision. We square things and Dublin City Council might be unusual by making sure that everybody participates.
On foot of what Deputy Casey said about making responsible decisions, Mr. Owen Keegan who is now chief executive of Dublin City Council is our former manager, as Senator Boyhan will be aware.
This country has experienced a difficult time. Councillor McGinley has mentioned economic buoyancy and I agree with him that buoyancy has returned to the market. We must, as local authorities, harness that opportunity and develop our counties. The Lexicon Library was built in Dún Laoghaire as a result of hard decisions. It is a community facility for all which - Senator Boyhan can correct me if I am wrong - has between 10,000 and 12,000 visitors per week. Many people lost their seats due to the matter but it was right to build a public amenity and not just for the residents of Dún Laoghaire but for anybody who wants to avail of it. Sometimes the hard decisions are the right ones and sometimes elections occur in between but we, as politicians, must still make the right decisions. I welcome the fact that Mr. McGinley has said that buoyancy is returning to local authority and national budgets. However, there is a huge piece of work for us all to do on this matter. I am sure committee members would love to have the witnesses return on another occasion to discuss this topic further. We will collate the views that have been aired today and relay them back.
The witnesses called for local authorities to be given more powers and that is something members say constantly, particularly as none of us has forgotten from where we come. I thank them for coming before the committee this morning and I look forward to ongoing engagement with them.
The next meeting of the joint committee will take place at 2 p.m. on Thursday, 17 May 2018, and its subject matter will be the quarterly update from the Minister in respect of Rebuilding Ireland. There may be a meeting prior to that, in which case we will contact members in advance.