Local Property Tax (LPT) is administered and collected by the Revenue Commissioners and subsequently transferred into the Local Government Fund (LGF). The funds are redistributed, by my Department, to local authorities in accordance with the Government’s allocation policies. Funding allocations are decided in advance of collection, based on estimates of the LPT yield in individual local authority areas for the following liability year. Accordingly, the allocations are determined on a local authority basis, rather than by Municipal District, or any other geographical area.
Under the current LPT allocation model, 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 help ensure they can deliver adequate levels of service. In some local authority areas, where the expected LPT yield is significantly higher than the baseline, the local authority is required to spend a portion of that yield on self-funding housing and/or roads services in the local authority area, in lieu of Exchequer funding for same. Apart from any self-funding amounts, the remainder of the LPT allocation can be used by the local authority for their own discretionary use. In addition, the power to vary LPT rates locally enables elected members to directly influence the level of LPT income they have to meet their expenditure requirements. Many local authorities use the discretionary income from LPT to fund General Municipal Allocations or to leverage Central Government grant funding of specific projects in the public realm.
It is a matter for each local authority, to determine its own spending priorities in the context of the annual budgetary process having regard to both locally identified needs and available resources. The elected members of a local authority have direct responsibility in law for all reserved functions of the authority, which include adopting the annual budget and authorising borrowing, and are democratically accountable for all expenditure by the local authority. Accordingly, it is a matter for individual local authorities to manage their own day-to-day finances in a prudent and sustainable manner.
The redistribution of discretionary LPT funding by a local authority to a Municipal District, is a matter for the authority itself, in accordance with its own budgetary priorities and I, as Minister, have no function in this regard.
