Barry Cowen (Laois-Offaly, Fianna Fail)
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62. To ask the Minister for Environment, Community and Local Government when he will publish regulations outlining the procedures local authorities must adhere to regarding changing the local property tax within the allowed 15% limits; and if he will make a statement on the matter. [25604/14]

Barry Cowen (Laois-Offaly, Fianna Fail)
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Under the Finance (Local Property Tax) (Amendment) Act 2013, councillors and councils were empowered to vary the rate of the property tax by 15% on a plus or minus basis. As the Minister knows, that legislation provides that the Revenue Commissioners must be informed and given notice of this by 30 September of the preceding year. The legislation also states that the regulations must be put in place by the Minister to allow for a period of consultation to be embarked upon with the representatives of the local authorities. It appears those regulations are on the Minister's desk. Will he publish those regulations immediately? Will he allow councils and councillors the authority to live up to their commitments to their electorate to vary the property tax downwards?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Effective from 1 July 2014, local authorities may vary the rate of property tax in their administrative area for the following year by up to 15% of the basic rate of the tax. As Deputy Cowen said, the decision must be taken by resolution of the council and must be notified to the Revenue Commissioners by 30 September in order to apply for the following year.

There are certain factors that local authorities are legislatively bound to take into account when deciding whether to vary their property tax for a given year. These include expected income and expenditure, accumulated assets and liabilities, and the economic impact in their local area. The decision is not one that can be taken in isolation as it will have a direct impact on the overall level of funding available to local authorities and, therefore, on their ability to discharge their statutory responsibilities. The financial implications of any decision to vary must be considered.

The power to vary the rate of local property tax, LPT, has been conferred on local authorities to further increase their autonomy. Elected members are already responsible for finalising the annual budget of the local authority – it is a reserved function for them – and the power to vary LPT will enable them to influence directly the level of local property tax income they have to meet their expenditure requirements in the future.

I will make regulations in the coming weeks to set out the process for local authorities who wish to vary their LPT base rates, including the factors they must consider and the type of public consultation they should undertake as part of the process.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I thank the Minister for his response. I take it from what he said that there would be no impediment from his office in cases where councils wish to vary the rate downwards for whatever reasons they see fit, based on consultations members have had with the electorate in recent months which culminated in their election. Could the Minister confirm that we will not have a repeat of last year's debacle when, having committed local property tax funding to local authorities, they had it taken from them? Could he confirm that the funding collected this year, or at least 80% of it, which was originally the intention of Government, will be forthcoming to local authorities where it is collected? I seek assurance that where the local property tax revenue exceeds the general purpose grant of the preceding year, no limits would be placed on the local authority in terms of the funds it has collected?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Government has indicated its intention to move towards 80% retention from 1 January 2015 and the remaining 20% of the tax will be used to assist weaker authorities in terms of the equalisation of funds. Naturally, the priority for the equalisation would be to support the local authorities with a weaker funding basis. I expect to notify local authorities in the coming weeks of those decisions. A public consultation process will take place from the middle of July for approximately one month and then local authorities will be in a position to make a decision in good time, as they must do in line with the legislation and with their electoral mandate to notify the Revenue Commissioners by 30 September 2014.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I am pleased to hear it is a firm commitment that the funds raised by means of property tax this year will be retained by local authorities and we will not have a repeat of what happened last year in spite of the commitment made. Perhaps the Minister could respond to my question on a situation where a local authority's collection surpasses the grant of the previous year. Is it the case that what is collected locally will remain locally and there will be no restraint on local authorities?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I can confirm to the Deputy that local property tax is a discretionary income that is collected locally and the maximum autonomy will be given to councillors in order to discharge their functions in respect of the income and expenditure, which they can vary up or down as the case may be in terms of the service provision they wish to apply. I expect the new found powers of councillors will be welcomed, even though during the course of the debate on the legislation on local government reform it was said that we were not giving additional powers to local councillors and that we were just getting rid of councils. One can now see the fruits of the type of decisions that will be made in the context of financial autonomy for councillors who must make important decisions about the level of service they wish to see across the board. That will influence the level of property tax they wish to apply in their administrative area.