Traders in Cork City could face a commercial rates hike of up to 3% as the city tries to plug a €3m deficit for next year.
As talks on the city council’s 2025 budget continue, it has emerged an increase in commercial rates is among the measures being considered as councillors and officials work towards striking a balanced budget.
There are suggestions the increase could be in the order of 3% but that has not been confirmed as negotiations continue.
The news comes days after famous Cork chipper Lennox’s closed after 73 years, with its owners citing the pressures of running a small business in Ireland today as among the reasons for closure. It also comes a week after the Government opted against reducing Vat in the budget.
Fianna Fáil councillor Sean Martin, chair of the city council’s finance committee, confirmed a potential rates increase was one of the items being discussed against the backdrop of a projected €3m deficit.
“But discussions are ongoing between councillors and management on a variety of things,” he said.
Those talks will continue until the budget meeting in early November, and with certain income yet to be factored in, the deficit may not be as large as it is currently projected, he said.
“One of the areas we have asked management to examine closely is the extension of the council’s rates rebate scheme, and to devise a model that would target rates relief at specific bands of rate payer, in an effort to ease the impact of any potential rates increase,” he added.
But Fine Gael councillor Shane O’Callaghan said given all the extra costs and pressures that are already being experienced by businesses, including increased energy costs, a rise in the cost of materials, minimum wage increases and an increase in the number of sick days, it is “not fair, reasonable or realistic” to expect them to pay extra commercial rates.
“The money to make up the €3m shortfall in the city council budget will simply have to be found somewhere else,” he said.
“Which is why I am again calling on Local Government Minister Darragh O’Brien to allocate extra local property tax baseline funding to Cork City Council.”
The city was allocated just €1.5m extra in LPT baseline funding this year despite soaring inflation pushing the city’s index-linked annual compensation payment to the county council arising out of the 2019 city boundary extension up from €13.5m to over €15.5m.
But officials have told councillors rate payers will not have to bear the cost of these increased compensation payments.
Mr O’Callaghan is due to raise the current deficit and the boundary extension compensation payments issue again at next Monday’s council meeting.
Councillors approved a 1.2% rates hike in 2022, and a 3.8% rates hike for 2023 but they did not increase the rates for 2024.
