Dublin property tax surplus to be consumed by homelessness bill

Surplus local property tax payments from Dublin homeowners will be consumed by the demand for homeless services expected to cost almost €60 million next year, city manager Owen Keegan has said.

Additional funding available from property tax receipts in Dublin city will reach just €4.2 million next year, following Government deductions and the 15 per cent cut for homeowners agreed by councillors.

The extra funding, which was expected to be used to improve city service s, represents less than 6 per cent of what Dubliners will pay in property tax next year.

City councillors will next Monday be asked to approve a budget of just under €750 million in gross expenditure to run the city in 2015. Included in the budget is €53 million the council expects to draw from its share of the property tax paid by Dublin homeowners.

Residential property owners in the city council area had been expected to pay €82 million collectively next year in property tax, but councillors voted last September to cut the rate by 15 per cent which would bring the 2015 returns to €70.2 million.

Of that sum the council gets to keep 80 per cent, with 20 per cent being distributed to local authorities with lower property values and poorer tax receipts, leaving the city council with €53.7 million.

However of that, €49.5 million will have to compensate for grants that are being withheld by central Government, leaving the council just €4.2 million in additional funding from the tax.

"The expectation of additional service provision as a consequence of LPT receipts coming directly to the City Council in 2015 will pose a major challenge for the City Council next year," Mr Keegan said.

The council is entering 2015 €26.2 million in credit, which was a “very satisfactory outcome” Mr Keegan said, and would allow it to maintain current service levels next year.

The council expects to spend €59.2 million on homeless services next year, in excess of €7 million more than was spent on homelessness in Dublin this year, and €16 million more than the council expected to spend on homelessness when it drew up its 2014 budget last year.

“The level of expenditure being incurred on homeless service has increased disproportionately to other local authority service costs in 2014, Mr Keegan said, “while this Budget provides for the continuation of current services, it has not been possible to allocate additional funding to expand existing services or commence new initiatives, except in the case of homeless services”.

Anti-property tax campaigner Cieran Perry said the inability of the council to expand its services proved the tax was purely a revenue raising measure.

“The Property Tax was sold to people with the promise of extra funding for local services. Communities were told that this extra income for Local Authorities would pay for increased services such as road repairs, street cleaning, parks and other communal facilities. This was clearly a lie as the Government never had any intention of using the revenue raised to fund improved services.”