Property tax not spent locally - rural areas receiving up to 50 times Dublin

RandomName2

An addendum in relation to proponents who supported the concept of tying "local services" taxation to property value.

Dubliners are subsidising their country counterparts in the funding of local services by up to 50 times, an analysis by Dublin City Council shows.

Dublin city has been allocated €5.06 per person through the Local Government Fund for this year, compared to €260.47 per person in Leitrim, according to figures compiled by the city council’s finance department.

The disparity is replicated nationally, with urban areas receiving far less funding than rural councils, but Dublin local authorities receiving least. The fund is the main source of money allocated by the Government to local authorities and is largely made up of Local Property Tax (LPT) payments from householders.

http://www.irishtimes.com/news/consumer/dubliners-get-up-to-50-times-less-funding-than-rural-dwellers-1.1730130

Scofflaw

Split this off from the old PT thread, hope nobody minds.

cordially,
Scofflaw

comongethappy

There was a slot regarding this on RTE radio this morning.

In some was I have sympathy for Leitrim Co Council.

The county is ridiculously underpopulated.
It has just over 1,000 rate paying businesses.
However it has over 2000 km of road to maintain.

Its always the case that lower population densities require proportionately more funding.

Its not ideal, but its the reality.

Scofflaw

comongethappy wrote: »

There was a slot regarding this on RTE radio this morning.

In some was I have sympathy for Leitrim Co Council.

The county is ridiculously underpopulated.
It has just over 1,000 rate paying businesses.
However it has over 2000 km of road to maintain.

Its always the case that lower population densities require proportionately more funding.

Its not ideal, but its the reality.

A reality, it might be pointed out, that has always been heavily encouraged by Irish "planning" practices. Socialisation of the cost of individual choices again.

Obviously, there's a relationship between the cost/citizen and the efficiency of living in cities, if you like, but it would be interesting to consider the relationship between the costs here and the planning profile of the different counties.

cordially,
Scofflaw

comongethappy

True, the scourge of the one-off house does nothing but make local governance more expensive.

ardmacha

Cue a series of rants about rural dwellers and unsophisticated analyses of costs. This is not about redistribution of resources per se, this is really about central government keeping their hands on the loot and not allowing any significant local autonomy.

crafty dodger

Well well well...What a surprise.....
The LOCAL Property tax has nothing to with 'Local'
It is just another central tax gone into the black hole, so now we can expect even more local charges and increases methinks 'to plug the shortfall in Local Authorities'

I am sick to death of the lies being propagated by Govt relating to taxes in general and in particular the PROMISE that 80% of LPTR would be spent locally.

Next up water charges...no idea how much that will be but it wont be a pleasant surprise

Then we will have the Universal Health Insurance which will be another compulsory tax to put you in a longer queue for a smaller range of services to be delivered by GPs who wont do it and hospitals which will have tiny staff!

Bob Geldof was a prophet.....Banana Republic

comongethappy

ardmacha wrote: »

Cue a series of rants about rural dwellers and unsophisticated analyses of costs. This is not about redistribution of resources per se, this is really about central government keeping their hands on the loot and not allowing any significant local autonomy.

So you would have Dublin retain its full share of LPT monies?

Banjo String

comongethappy wrote: »

So you would have Dublin retain its full share of LPT monies?

I don't think anyone is suggesting that.

However, as was always suspected. This is merely another tax, paid into a central pot under a pseudo name. The "L" in LPT Supposedly meant LOCAL.

Clear now that it is only a salary paying fund. Nice timing of the news though, what with the "L" E around the corner. If only a FG member would call to my door rather than phantom drop some party leaflets I could drill him on this.

RandomName2

Banjo String wrote: »

I don't think anyone is suggesting that.

However, as was always suspected. This is merely another tax, paid into a central pot under a pseudo name. The "L" in LPT Supposedly meant LOCAL.

Clear now that it is only a salary paying fund. Nice timing of the news though, what with the "L" E around the corner. If only a FG member would call to my door rather than phantom drop some party leaflets I could drill him on this.

The problem isn't so much the dishonesty - that's really to be expected.

It's the fact that people who live in urban areas are being punished for doing so. When we develop taxes, we try (generally) to make them fair - and by fair I mean making such taxation proportional to the capacity to pay. The LPT doesn't make any attempt to tie the burden of payment with capacity to pay, and used the lie of local funding to justify this.

If you are going on market value solely, and disregarding the cost of local services, a more honest approach would be to take a 10% whack in tax from all property sales (not including existing CGT, of course). This tax is as nonsense as putting a 5% increase on income tax for people living in County Wicklow, because of the privilege of living in "the garden of Ireland".

Godge

RandomName2 wrote: »

The problem isn't so much the dishonesty - that's really to be expected.

It's the fact that people who live in urban areas are being punished for doing so. When we develop taxes, we try (generally) to make them fair - and by fair I mean making such taxation proportional to the capacity to pay. The LPT doesn't make any attempt to tie the burden of payment with capacity to pay, and used the lie of local funding to justify this.

If you are going on market value solely, and disregarding the cost of local services, a more honest approach would be to take a 10% whack in tax from all property sales (not including existing CGT, of course). This tax is as nonsense as putting a 5% increase on income tax for people living in County Wicklow, because of the privilege of living in "the garden of Ireland".

Let's not get back into the argument about capacity to pay and the difference between income and other taxes and various other side-arguments. This thread has been split off because it is about the spending side of the property tax i.e. what it will be used for. The other thread can be used for arguments about how, why and whether it should be raised. This thread assumes that it is in place and the money is coming in.

crafty dodger

Godge wrote: »

Let's not get back into the argument about capacity to pay and the difference between income and other taxes and various other side-arguments. This thread has been split off because it is about the spending side of the property tax i.e. what it will be used for. The other thread can be used for arguments about how, why and whether it should be raised. This thread assumes that it is in place and the money is coming in.

OK Lets focus on the spending side.....

How much is going to be spent on local services, delivered by each Local Authority, by county?

Then compare this with the total value of LPT collected and you will undoubtedly see that only a small proportion will be spent/allocated on local services
There will be cutbacks in services (Local Authorities still dont have a budget allocation confirmed for this year according to Eamon Ryan on a radio program yesterday) as you cant spend what you dont have.

Where I live in DunLaoighaire Rathdown there are dangerous sections of road (Blackglen Road) which carry large volumes of traffic, which are scheduled for improvement for years. However, nothing happens because of 'lack of funding'

If people genuinely believe that LPT will increase local spending they are deluding themselves.

ednwireland

crafty dodger wrote: »

as you cant spend what you dont have.

hasnt stopped the government so far

antoobrien

ardmacha wrote: »

Cue a series of rants about rural dwellers and unsophisticated analyses of costs.

an analysis by Dublin City Council shows.

Pot kettle black.

Cookie_Monster

why can't some of the LPT in cities go towards subsidising public transport since central gov seem so reluctant. Would be a good use of the funds to provide local services rather than sending it off down the country in such large volumes.

Godge

comongethappy wrote: »

So you would have Dublin retain its full share of LPT monies?

Yes, I would.

What is the point of a local tax if it is not spent locally.

John_C

Cookie_Monster wrote: »

why can't some of the LPT in cities go towards subsidising public transport since central gov seem so reluctant.

I was thinking that myself today. They should use Dublin's surplus to pay the subsidy to Dublin Bus and some other Dublin-only expenses. That way, local taxes are kept local and the central government makes a saving to cover the shortfall elsewhere.

markpb

comongethappy wrote: »

So you would have Dublin retain its full share of LPT monies?

Yup, why not. That still leaves income tax, capital gains tax, corporation tax, VAT and a plethora of other taxes that would still go to the central fund.

sillyoulfool

John_C wrote: »

I was thinking that myself today. They should use Dublin's surplus to pay the subsidy to Dublin Bus and some other Dublin-only expenses. That way, local taxes are kept local and the central government makes a saving to cover the shortfall elsewhere.

Why should my LPT tax go to subsidize a state owned monopoly that is incapable of effectively delivering on its mandate.
Transport services in the capital should be deregulated and subsidies if required offered to all providers in an open competition.

Godge

John_C wrote: »

I was thinking that myself today. They should use Dublin's surplus to pay the subsidy to Dublin Bus and some other Dublin-only expenses. That way, local taxes are kept local and the central government makes a saving to cover the shortfall elsewhere.

Excellent, that should mean we close all provincial bus services and inter-city rail as they are the biggest drain on the public transport subvention unless of course the property tax outside Dublin can pay for it.

If you want to play the game that Dublin should pay for its own services, you will lose each time as the cost of electricity, public transport, hospital services, education, public lighting, roads etc. is more expensive in lower population densities.

John_C

Godge wrote: »

Excellent, that should mean we close all provincial bus services and inter-city rail as they are the biggest drain on the public transport subvention unless of course the property tax outside Dublin can pay for it.

Inter-city rail is a national service so that'll always be paid for out of central funding.

I've no problem at all with central funding being used to subsidise the parts of the parts country that can't fully cover their local costs. But that's not the case in Dublin. The local taxes being transferred out of Dublin could cover the cost of the Dublin Bus subsidy, probably with a bit so spare. One of the reasons for the property tax was that it would strengthen local democracy, that people would pay more attention to what their local council is up to if they were paying for it directly. It's no co-incidence that business paying rates are the most vocal in trying to hold the councils to account.

If the government just wanted to raise and extra 500 million in taxes, it would have been much easier and fairer to add a percent or two to the income tax rate. The local tax was supposed to achieve more than that. But the current system, where the money is all paid to revenue and the minister decides how much to allocate to each area, still keeps all the power with the central government. There's nothing local about the tax.

Grumpypants

The way that article is worded gives the impression that Dublin is subsidizing the rest of the country rather than the other way round but it's simply that it is cheaper to provide services in dense areas on a per person basis.

Scofflaw

Grumpypants wrote: »

The way that article is worded gives the impression that Dublin is subsidizing the rest of the country rather than the other way round but it's simply that it is cheaper to provide services in dense areas on a per person basis.

No, Dublin is subsidising the rest of the country. People repeat the claim that the rural areas subsidise Dublin, but have never provided figures to show it to be the case. In fact, every set of figures, including this one, points the other way.

Just to give some idea of what dreadful BS your claim is, let's take the figures reported from the IT, and see what they add up to:

Region|Population|LGF/capita|Total (€m)
Dublin City|527612|€5.06|€2.67
Fingal |273991|€1.66|€0.45
South Dublin |265205|€3.48|€0.92
Leitrim|31798|€260.47|€8.28
Monaghan|60483|€169.43|€10.25
Donegal|161137|€141|€22.72

Your claim is basically that local government tax revenue going into the Local Government Fund in Dublin is actually less than €2.67m, so it's being subsidised, while Leitrim actually generates more than €8.3m, Monaghan more than €10.25m, and Donegal more than €22.72m in order to subsidise Dublin.

Or, to put it another way, you're claiming that Leitrim's 30,000 odd people, low valued property and roughly 1200 businesses generate just under twenty times what Fingal's quarter of a million people, high valued property and tens of thousands of businesses generate. More than twenty times, actually, since supposedly Leitrim et al are subsidising Dublin.

It's hard to really describe just how appallingly stupid a claim this is, and what a gross lack of comprehension of economics, taxation, and indeed basic arithmetic it implies.

regards,
Scofflaw

Banjo String

Banjo String wrote: »

Clear now that it is only a salary paying fund.

This is the truth. Next time I'm passing through Leitrim I'll have to see all the fabulous infrastructure that this money is funding and maintaining. Not a chance it's all going to be squandered amongst cronies and council workers who sit around scratching their arses all day. Not a chance at all.

This money should be spent cleaning up Dublin in a big way, I mean, the city is absolutely filthy compared to any comparable European city (except for Brussels, maybe). And all this signifies is that the issue won't be tackled at any point in the near future, because the money is all going into a massive black hole of waste and local corruption in the back end of nowhere.

Good loser

Scofflaw wrote: »

No, Dublin is subsidising the rest of the country. People repeat the claim that the rural areas subsidise Dublin, but have never provided figures to show it to be the case. In fact, every set of figures, including this one, points the other way.

Just to give some idea of what dreadful BS your claim is, let's take the figures reported from the IT, and see what they add up to:

Region|Population|LGF/capita|Total (€m)
Dublin City|527612|€5.06|€2.67
Fingal |273991|€1.66|€0.45
South Dublin |265205|€3.48|€0.92
Leitrim|31798|€260.47|€8.28
Monaghan|60483|€169.43|€10.25
Donegal|161137|€141|€22.72
Your claim is basically that local government tax revenue going into the Local Government Fund in Dublin is actually less than €2.67m, so it's being subsidised, while Leitrim actually generates more than €8.3m, Monaghan more than €10.25m, and Donegal more than €22.72m in order to subsidise Dublin.

Or, to put it another way, you're claiming that Leitrim's 30,000 odd people, low valued property and roughly 1200 businesses generate just under twenty times what Fingal's quarter of a million people, high valued property and tens of thousands of businesses generate. More than twenty times, actually, since supposedly Leitrim et al are subsidising Dublin.

It's hard to really describe just how appallingly stupid a claim this is, and what a gross lack of comprehension of economics, taxation, and indeed basic arithmetic it implies.

regards,
Scofflaw

Subsidies is a loaded word. These transfers have taken place for many years - probably since rates on houses were abolished in 1978.

Good roads in Monaghan benefit Dubliners too.

Rates from hotels in Dublin come presumably from guestnights taken by country cousins.

To access Dublin hospitals people have to travel ( & stay) there from all over the State.

OwaynOTT

We should all live I. One big. Assize apartment block in central dublin or make Dublin something akin to Megacity 1.
Sure what do we need the rest of the country for?

RandomName2

Good loser wrote: »

Subsidies is a loaded word. These transfers have taken place for many years - probably since rates on houses were abolished in 1978.

Good roads in Monaghan benefit Dubliners too.

Rates from hotels in Dublin come presumably from guestnights taken by country cousins.

To access Dublin hospitals people have to travel ( & stay) there from all over the State.

While that is true, you must, of course, know that that's merely playing devil's advocate. They are, at best, edge cases.

Godge wrote: »

Let's not get back into the argument about capacity to pay and the difference between income and other taxes and various other side-arguments. This thread has been split off because it is about the spending side of the property tax i.e. what it will be used for. The other thread can be used for arguments about how, why and whether it should be raised. This thread assumes that it is in place and the money is coming in.

Well, with all due respect, the two are inseparable. Okay, we are not talking about hypothetical scenarios; but the heart of the matter is the distribution of the burden:
Why should urban residents face a larger burden of taxation than their rural counterparts?

Prior to the tax coming into force, some of the arguments centred around the proposition (which was highly disputable) that the rate of taxation that a person was to be lumped with, broadly speaking, analogous to the amount of local authority spending that was taking place in their area. Events have proven this false.

I can't, in all honesty, advocate a position whereby the LPT is only spent locally. There is too much of the tax collected in urban areas, and too little collected in rural areas, for it to realistically work (imo). Letting local authorities in rural counties go to the wall for this sake would hardly help the situation. Indeed, this concern would credence to the suggestion that the collection of the tax, given that it is a fixture, should be subject to more even distribution.

Cool Mo D

OwaynOTT wrote: »

We should all live I. One big. Assize apartment block in central dublin or make Dublin something akin to Megacity 1.
Sure what do we need the rest of the country for?

OR, just maybe, perhaps, there is a middle ground, where good planning in rural areas means more people living in villages and small towns where you can efficiently provide schools, sewerage, broadband, police, fire services, roads, healthcare, etc... instead of having half the country spread across every rural field in Ireland, completely car dependent.

Some people, like farmers, have good reason to live in one-off houses - but it would be a lot easier to provide for everyone if rural Ireland became more small town Ireland.

Godge

RandomName2 wrote: »

While that is true, you must, of course, know that that's merely playing devil's advocate. They are, at best, edge cases.



Well, with all due respect, the two are inseparable. Okay, we are not talking about hypothetical scenarios; but the heart of the matter is the distribution of the burden:
Why should urban residents face a larger burden of taxation than their rural counterparts?

Prior to the tax coming into force, some of the arguments centred around the proposition (which was highly disputable) that the rate of taxation that a person was to be lumped with, broadly speaking, analogous to the amount of local authority spending that was taking place in their area. Events have proven this false.

I can't, in all honesty, advocate a position whereby the LPT is only spent locally. There is too much of the tax collected in urban areas, and too little collected in rural areas, for it to realistically work (imo). Letting local authorities in rural counties go to the wall for this sake would hardly help the situation. Indeed, this concern would credence to the suggestion that the collection of the tax, given that it is a fixture, should be subject to more even distribution.

None of the arguments centred around the proposition that the rate of taxation was broadly analagous to the local authority spending that was taking place in their area. The argument that was made was that the total amount spent in the country was analagous to the revenue to be raised.

The reason there is so much tax collected in urban areas is that the property there is more valuable and there is more of it. When the tax was proposed, it was said that in the future it would be possible for local authorities to change the rate at which it is charged. This would allow for more even collection.

Scofflaw

Good loser wrote: »

Subsidies is a loaded word. These transfers have taken place for many years - probably since rates on houses were abolished in 1978.

Before that too, I suspect.

Good loser wrote: »

Good roads in Monaghan benefit Dubliners too.

Rates from hotels in Dublin come presumably from guestnights taken by country cousins.

To access Dublin hospitals people have to travel ( & stay) there from all over the State.

All of these things are true whether the rural areas receive urban subsidies or not. Indeed, the argument you make also neatly supports its own counter-argument - better roads in Dublin are actually more likely to benefit people from Monaghan than the reverse, since the proportion of Monaghan residents who need to go to Dublin is far higher than the proportion of Dubliners who need to go to Monaghan.

Also, higher demand lowers room rates? Mm, probably not.

cordially,
Scofflaw

nesf

Scofflaw wrote: »

Before that too, I suspect.



All of these things are true whether the rural areas receive urban subsidies or not. Indeed, the argument you make also neatly supports its own counter-argument - better roads in Dublin are actually more likely to benefit people from Monaghan than the reverse, since the proportion of Monaghan residents who need to go to Dublin is far higher than the proportion of Dubliners who need to go to Monaghan.

Also, higher demand lowers room rates? Mm, probably not.

cordially,
Scofflaw

I think it's easier to analyse this in terms of where Governments get their seats. At least to some extent. I know in my home rural area spending does seem rather concentrated around particular areas.

Dannyboy83

nesf wrote: »

I think it's easier to analyse this in terms of where Governments get their seats. At least to some extent. I know in my home rural area spending does seem rather concentrated around particular areas.

I get the impression that Cork, both urban and rural, does even worse than Dublin in terms of funding when you consider the Property Tax + Industrial output

Cork County Council : €2.9m local government funding is ‘peanuts’

Cork City Hall: No funding to fix roads

Cork seems to be losing out on property tax


And again, relative to industrial output

http://www.cso.ie/en/releasesandpublications/er/ciprcd/censusofindustrialproduction-localunitsregionalandcountydata2011/#.UzRDefl_t8E
In 2011, the south-west region accounted for 36.2pc, or €36.7bn, of Irish industrial output.
Dublin as a region produced 18.9pc, or €19.2bn, worth of industrial gross output in 2011.
The south-west region, with a much, much smaller population, accounted for 15pc of Irish-owned industry.

In 2011, County Cork had the highest value of gross output per person engaged in Ireland at €1.18 million. Mayo and Roscommon combined was the next highest at €0.78 million, while County Dublin was third in the rankings with €0.62 million per person.

Dannyboy83

There is actually an article in the paper today about how Cork is subsidising other areas. (The state of disrepair of the roads in Cork is shamefully bad to be fair - foreign customers always comment on it when they come in)
I'm sure the same applies to Dublin.

Cork motorists ‘subsidising’ repairs elsewhere
Friday, March 28, 2014

A Fine Gael TD says “a gross injustice has been perpetuated by successive governments” on motorists in Cork who are subsidising road repairs in other counties while they watch their own crumble.

Jim Daly is in discussions with the Department of Environment to provide what he claims will be a better road maintenance service to Cork motorists after they coughed up €130m in road tax last year, 12.25% of the national take.

Yet when it came to payback from the Government for road maintenance, Cork received just 8.4% of national funding — meaning it is subsidising other counties, according to Mr Daly.

Mr Daly said he fully supports the call by Cork County Council to have the money collected in motor tax in the county to be spent in the county.

“I have conducted a study of the money collected from motor tax and the subsequent allocations from the Department of the Environment to all of the city, county, and town councils in Cork. There is no doubt but Cork motorists are subsidising other local authorities.”

I wonder if this motion from Cork County Council will be extended to the property tax?

nesf

I'm pretty sure any area you define that has a large concentration of industry and FDI in particular will appear to be subsidising the other areas. The issue being that this analysis is too simple. All that GDP generated in Cork is concentrated into quite a small part of it. It's the same with wealth generated in Dublin etc.

Knob Longman

crafty dodger wrote: »

Well well well...What a surprise.....
The LOCAL Property tax has nothing to with 'Local'
It is just another central tax gone into the black hole, so now we can expect even more local charges and increases methinks 'to plug the shortfall in Local Authorities'

I am sick to death of the lies being propagated by Govt relating to taxes in general and in particular the PROMISE that 80% of LPTR would be spent locally.

Next up water charges...no idea how much that will be but it wont be a pleasant surprise

Then we will have the Universal Health Insurance which will be another compulsory tax to put you in a longer queue for a smaller range of services to be delivered by GPs who wont do it and hospitals which will have tiny staff!

Bob Geldof was a prophet.....Banana Republic

And most of the country can't stand him because of it, A clever Irishman is a rarity but Geldof was never a fool, No wonder he lives abroad.

This property tax was always going to be a shoddy unorganized joke, Another example of rural politicians not giving a damn about urban areas.

comongethappy

You can see why successive governments have stalled over having a proper executive powered elected Mayor for Dublin.

Can you imagine the local government funding situation if Dublin's LPT contribution went to the Mayors office to spend.

WakeUp

Knob Longman wrote: »

And most of the country can't stand him because of it, A clever Irishman is a rarity but Geldof was never a fool, No wonder he lives abroad.

This property tax was always going to be a shoddy unorganized joke, Another example of rural politicians not giving a damn about urban areas.

Quite the sweeping statement you have made there do you include yourself in that? or is it just meant for everyone else..

WakeUp

Knob Longman wrote: »

And most of the country can't stand him because of it, A clever Irishman is a rarity but Geldof was never a fool, No wonder he lives abroad.

This property tax was always going to be a shoddy unorganized joke, Another example of rural politicians not giving a damn about urban areas.

WakeUp wrote: »

Quite the sweeping statement you have made there do you include yourself in that? or is it just meant for everyone else..

So Knob, are you about?..Im curious to hear what you think...