Seán Crowe (Dublin South West, Sinn Fein)
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234. To ask the Minister for Environment, Community and Local Government due to local government changes throughout the country, his proposals for towns who have to make up substantial differences between their historical commercial rate and the county rate. [42650/14]

Alan Kelly (Tipperary North, Labour)
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Oneof the key elements of Putting People First, the Action Programme for Effective Local Government, was a refocusing and re-invigoration of local authorities in support of enterprise, business and job creation. The Action Programmeindicated that, in the context of the reorganisation of local governance structures, the proposed new municipal districts would provide an opportunity to achieve a more coherent approach to rates and charges on a county-wide basis having regard to funding requirements and the need to support employment and business competitiveness. The Local Government Reform Act 2014 provided for rates harmonisation to cater for differences between Annual Rates on Valuation (ARVs) of towns and counties. The approach taken to rates harmonisation was to seek to ensure, on the one hand, that harmonisation does not lead to a significant net loss of revenue in individual counties with consequential implications for services and, on the other hand, that increases in rates do not impact negatively on businesses and employment.

My Department consulted with local authorities and devised a ‘Base Year Adjustment’ (BYA) mechanism to phase in increases and decreases in the ARV over a maximum of 10 years. From 2015 onwards, ratepayers will receive a rates bill clearly indicating the new harmonised ARV for the area but the annual amount payable by the individual ratepayer will be modified by applying a credit or debit to that bill i.e. the BYA.

In 2015, this adjustment will effectively neutralise any increase of decrease for ratepayers that would otherwise take effect as a result of the difference in the new ARV for 2015 and that which applied in their rating authority in 2014. In other words, ratepayers will not pay any more (or less) in 2015 than they did in 2014, except in circumstances where there has been a change in the valuation of their premises or other circumstances affecting their liability. The BYA for 2015 will therefore be equal to the difference between the old ARV for that ratepayer and the new ARV. This credit or debit base year adjustment will reduce annually as harmonisation is achieved over a period of years.

The decision on the new ARV and the amount of adjustment to be applied each year, and consequently the number of years it will take to harmonise the ARV for the county, will be a decision for the elected members.