Michael Fitzmaurice (Roscommon-Galway, Independent)
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1789. To ask the Minister for Housing, Planning, and Local Government if his attention has been drawn to the fact that €15.5 million was collected in property tax in County Galway and it is one of the most underfunded rural parts of Ireland; his plans to leave a bigger percentage of that tax to councils; and if he will make a statement on the matter. [1425/18]

Michael Fitzmaurice (Roscommon-Galway, Independent)
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1791. To ask the Minister for Housing, Planning, and Local Government when proper funding will be provided through the equalisation fund to councils in order that they can fill jobs in different departments of the councils; and if he will make a statement on the matter. [1429/18]

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I propose to take Questions Nos. 1789 and 1791 together.

The funding system for local authorities is a complex one, as authorities derive their income from a variety of sources including commercial rates, charges for goods and services, Local Property Tax (LPT) as well as funding from Government Departments and other bodies.

Local retention of LPT began in 2015 and is now established as an important source of funding for the local government sector, thereby reducing reliance on central funding. The Government decided that 80% of the estimated LPT liability in each local authority area for a given year is retained in that area to fund public services, notwithstanding any local variation decisions. The remaining 20% of LPT is re-distributed to provide equalisation funding to those local authorities that have lower property tax bases, due to the variance in property values and density across the State. This reflects the fact that local authorities vary significantly from one another in terms of size, population, public service demands, infrastructure and income sources.

In accordance with decisions taken by Government regarding the distribution of LPT, every local authority has a minimum level of funding available to it, known as the baseline.  There are variances across the country in terms of LPT levels but it is important that all local authorities receive at least this baseline level of funding to ensure they can deliver services. Equalisation is the process that ensures that every local authority’s LPT allocation is brought up to this baseline and there is a finite level of funding available for this purpose. For 2018, the overall equalisation requirement is €139m. €97m of this is from the 20% contribution from all local authorities, with the Exchequer providing the remaining €42m.

The role of local authorities in deciding the annual local adjustment factor is an important part of LPT funding and a key connection between revenue raising and expenditure decisions at local level. Every local authority must decide whether or not to increase or decrease LPT rates by up to 15% each year. Galway County Council varied the basic rate of LPT upwards by 10% for 2017. Accordingly, the total 2017 LPT allocation paid to Galway County Council in 2017 was €15.97m, which includes the extra €1.45m raised by the 10% increase. For 2018, no variation has been applied by Galway County Council, meaning it will receive an LPT allocation of €14.52m.

I am satisfied that the current overall funding model enables local authorities to support an appropriate level of service provision across the State.