How the pro­posed changes to rates would work

New Ross Standard - - NEWS - By DAVID LOOBY

THE Head of Fi­nance at Wex­ford County Coun­cil An­nette O’Neill out­lined pro­pos­als for changes to the amount of rates payable by lo­cal busi­nesses in 2018.

Com­mer­cial Rates are a statu­tory charge, the in­come from which is used to part-fund the an­nual rev­enue (day-to-day) ex­pen­di­ture of the lo­cal au­thor­ity). It is a bal­anc­ing fig­ure, de­rived at Bud­get time by tak­ing the Coun­cil’s to­tal es­ti­mated ex­pen­di­ture and de­duct­ing to­tal es­ti­mated in­come (in­clud­ing prop­erty tax in­come).

The re­sult­ing fig­ure (ap­prox­i­mately €34m per Wex­ford County Coun­cil’s 2017 Bud­get) is then di­vided by the to­tal rate­able val­u­a­tion (ev­ery com­mer­cial prop­erty’s in­di­vid­ual rate­able val­u­a­tion all added to­gether – ap­prox €474,400) to give what’s known as the An­nual Rate on Val­u­a­tion – ARV (cur­rently 71.52).

Each com­mer­cial prop­erty owner is then charged a rates bill for the year, by tak­ing the prop­erty’s rate­able val­u­a­tion and mul­ti­ply­ing that by the rel­e­vant ARV mul­ti­plier (cur­rently €71.52 for most of Co Wex­ford ratepay­ers). If your prop­erty has a rate­able val­u­a­tion of 100, then your rates bill for 2017 is €7,152.00

A prop­erty’s rate­able val­u­a­tion is de­ter­mined by the National Val­u­a­tion Of­fice, com­pletely in­de­pen­dently of the county coun­cil. Rates har­mon­i­sa­tion was in­tro­duced na­tion­ally in 2015 and Wex­ford County Coun­cil com­menced a move­ment of the ARV in the for­mer Wex­ford, En­nis­cor­thy and New Ross rat­ing au­thor­i­ties to­wards the gen­eral ARV for the county, €71.52, which is al­ready paid by busi­nesses in ru­ral south west Wex­ford. The leg­is­la­tion pro­vided for a max­i­mum pe­riod of ten years for har­mon­i­sa­tion and for a de­ci­sion of the coun­cil on the level of the move in the har­mon­i­sa­tion process an­nu­ally as part of their bud­get process. Wex­ford Co Coun­cil have agreed a move of 2.9 per cent in both 2016 and 2017.

In 2016, the first year of the har­mon­i­sa­tion move­ment, the coun­cil ad­justed the Rates In­cen­tive Scheme (in­tro­duced in 2013) to as­sist ratepay­ers, and specif­i­cally SMEs with the move­ments to­wards har­mon­i­sa­tion.

Ms O’Neill said there has been no rates in­crease since 2008.

‘2018 will rep­re­sent a decade of no in­creases, with the ex­cep­tion of rates har­mon­i­sa­tion. 2.9 per cent is not sus­tain­able if the de­vel­op­ment plan for the county is to be de­liv­ered. Since the har­mon­i­sa­tion of Wex­ford Bor­ough in 2017 the rates har­mon­i­sa­tion at 2.9 per cent will only gen­er­ate €88,000 in 2018. In 2019 this will drop fur­ther, to €48,000. From 2019 to 2024 rates will gen­er­ate ap­prox €35,000 a year.’

Ms O’Neill said that at the up­com­ing bud­get dis­cus­sion for 2018 coun­cil­lors will consider and de­cide on a pro­posal to ap­ply full har­mon­i­sa­tion in the re­main­ing for­mer town rat­ing ar­eas, New Ross and En­nis­cor­thy.

The pro­posal to be con­sid­ered by mem­bers of Wex­ford County Coun­cil will in­clude a special rates in­cen­tive scheme for these rat­ing ar­eas.

Ms O’Neill said the pro­posal will see the Rates In­cen­tive Scheme in­creased from 6 per to 15 per cent for the 320 ratepy­ers in the for­mer New Ross Town rat­ing area.

‘82 per cent of the 320 ratepay­ers in the for­mer New Ross Town rat­ing area cur­rently pay €5,000 or less in rates.

‘For ratepay­ers with this level of Com­mer­cial Rates the full har­mon­i­sa­tion will add €1,088 to their rates bill but the Special Rates In­cen­tive Scheme will see the grant avail­able un­der this scheme in­crease from €300 to €913, re­sult­ing in an over­all net in­crease of €475 or €9.13 per week.’

The har­mon­i­sa­tion process will re­quire a min­i­mum move­ment of 2.9 per cent or €145 in this par­tic­u­lar ex­am­ple.

The pro­posal for full har­mon­i­sa­tion, a move­ment of 21.76 per cent, with the ad­di­tion of the Special Rates In­cen­tive Scheme means that the cost of the additional move to full har­mon­i­sa­tion is €330 in this ex­am­ple of €6.34 per week.

She said: ‘ The need to har­monise is in­formed by a num­ber of is­sues in­clud­ing the coun­cil’s fi­nan­cial po­si­tion which is un­der se­vere pres­sure. There has been no in­crease in Rates since 2008 and cen­tral fund­ing for the lo­cal au­thor­ity re­mains at 2013 lev­els. The Lo­cal Prop­erty Tax doesn’t pro­vide a sus­tain­able in­come for the pur­pose of se­cur­ing bor­row­ing for de­liv­er­ing the de­vel­op­ment plans out­lined for the meet­ing.’

County Wex­ford cur­rently re­lies on the national equal­i­sa­tion fund to achieve 2013 lev­els of fund­ing and there would need to be at least an additional 9,000 more prop­er­ties in the county pay­ing LPT be­fore there would be any buoy­ancy, she added.

‘ The county needs sig­nif­i­cant in­vest­ment and needs to be in a po­si­tion to at­tract in­crease com­mer­cial and tourism ac­tiv­ity and this will bring ben­e­fits to all business own­ers in the county.’

Ms O’Neill said the coun­cil has taken a proac­tive po­si­tion to de­velop com­mer­cial prop­er­ties and solution to pro­mote the at­trac­tive­ness of the county and the time is right to move on this pro­posal and this is why the coun­cil has de­vel­oped and is mov­ing to de­liver the Eco­nomic De­vel­op­ment Pro­gramme for the county.

‘ The county’s rate pay­ers and busi­ness­peo­ple need this level of in­vest­ment in the county to as­sist in grow­ing and de­vel­op­ing their business and al­low­ing the county to com­pete with other coun­ties and coun­tries for at­tract­ing com­mer­cial ac­tiv­ity.’

Ms O’Neill said Wex­ford County Coun­cil pro­poses to bor­row sig­nif­i­cantly to de­liver the de­vel­op­ment pro­gramme pro­posed and with low in­terst rates cur­rently avail­able, she said the tim­ing for this is right once the coun­cil can prove that it has a sus­tain­able source of in­come to re­pay this bor­row­ing.

She said the base rate of 71.52 can­not be in­creased un­til har­mon­i­sa­tion of rates is fi­nalised, adding that ev­ery 1 per cent move­ment in Com­mer­cial Rates would im­pact on Coun­cil in­come at a level of €338,000 a year.

On November 27, coun­cil­lors will consider the bud­get for Wex­ford County Coun­cil for 2018 and this will in­clude con­sid­er­a­tion of the har­mon­i­sa­tion pro­posal to­gether with a pro­posal to in­crease rates in the en­tire county by 3 per cent, which would gen­er­ate over €1m for the lo­cal au­thor­ity.

She said this would lead to a fur­ther in­crease over the har­mon­i­sa­tion in the rates bill for the New Ross town busi­nesses but with the special Rates In­cen­tive Scheme this additional in­crease will also at­tract the 15 per cent SRIS.

‘Most busi­nesses in the New Ross town area will there­fore see an an­nual in­crease in the re­gion of €300 per year fol­low­ing the pro­posed har­mon­i­sa­tion and rates in­crease.’

The mat­ter will be fully discussed with mem­ber of the coun­cil at the end of November.

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