LPT increase was a good move for Longford's development, meeting hears

That was the main message of a presentation delivered by Head of Finance for Longford County Council John McKeon who addressed council members at the monthly meeting recently.

A total of 10,519 housholds in Longford are paying €104 per annum, in property tax, while 5,539 more are paying €259 per annum and very few paying the higher rates.

“95% of Longford Local Property Tax payers are currently paying less than €5 per week. 66% of those pay less than €2 per week. And no change to that is proposed for 2020,” said Mr McKeon.

“A total of 16,058 (95%) of Longford properties have a valuation of less than €150,000. The cost of the current +15% variation to 95% of Longford LPT taxpayers is less than €13.50 per annum - that’s the cost of the variation.

“And then the benefit to Longford County Council in pure hard cash if we did nothing more with it would be €318,060.”

This €318,060 has the potential to finance a €3m fixed rate (1.25%) loan over ten years, he added. And that €3m has the potential to attract €12m in Capital Project Funding to Longford.

“The hope of the vision last year was to commit to varying the LPT upwards by at least 7.5% each year for the next ten years. We’d ringfence this 7.5% each year to service a 1.5m loan over ten years and use this €1.5m loan to leverage €6m in project funding and then use any increase over that 7.5% to be added to the General Municipal Allocation or project funding for that year,” Mr McKeon explained.

The actual capital project grants awarded in 2018, he added, amounted to €12.35m. It was anticipated at that time that this amount would be just €6m.

“In September 2018, the members of Longford County Council made history by becoming the first and only local authority in the country during the last council to vary the LPT upwards by 15%,” Mr McKeon continued.

“At the time, it was a very brave, insightful decision which proved to be the right decision and now you can see it has proved to be a very lucrative decision.

“It kick started a good year in Longford. It’s probably the single biggest year of investment that Longford has ever seen.

“Since then, this Longford model has been used at a national stage as an example of how best to attract funding into local authorities. So it’s catching on.”

Projects that have benefited from this increase in income include the Longford Connected Project, which received €3m, Norman Heritage Park, Granardy (€2.9m), Edgeworthstown Library (€2.4m), Edgeworthstown Public Realm (€1.3m), LIADH Digihub (€700k), CLÁR (€255k), ORIS (€1.2m), and Towns & Villages (€594k).

In addition, the General Municipal Allocation (GMA) budget has seen significant growth since 2017.

“In 2017, the General Municipal Allocation was €174k. This grew to €279k in 2018 and further grew with the variation last year of 15% to €333k in 2019,” said Mr McKeon.

The extra funding was distributed among a variety of projects and schemes including tourism promotion, Tidy Towns grants, Town Twinning, burial ground grants, intercultural events and contributions to voluntary bodies such as festivals, etc.

“The recommendation now is to retain LPT variation of +15% for 2020 - the same as we had last year,” said Mr McKeon in conclusion.

“This is to be allocated to service loans to match a fund of €12m in Capital Projects.”

Mr McKeon also recommended that the council ring fence and retain any LPT variation monies each year to be spent specifically on capital projects while keeping GMA funding at 2018 levels.

Councillors commended Mr McKeon on his great work and also expressed their delight that such a risky decision last year brought about such prosperity for the county.

“The unanimous decision last year to vary the LPT upwards by 15% was unprecedented,” said Cllr Colm Murray (FG).

“We hoped that it would turn out to be a success in terms of leveraging funding to the urban and rural generation fund of about €6m. The success was way beyond what we had imagined. We managed to leverage €12m funding of what was for most people an average of €10 euro extra in the property tax.

“I know at the local elections, there were a certain amount of candidates across the board who thought that the increase was a bad decision. I fully stand over that decision and I think every member of the council can fully stand over it and be proud of the decision that we made at the time.

“I’m proposing that we vary the LPT upwards by 15% again, which would mean the same LPT as last year. We set a precedent and now we have to keep ahead of the other counties.”

His proposal was seconded by Cllr Gerry Warnock (Ind).

“To exceed our own expectations by 100% was one of the shining moments of the last council. We’ve created a model that has been replicated by other local authorities,” Cllr Warnock said.

Fianna Fáil's Cllr Seamus Butler agreed, adding that Longford County Council 'has made a silk purse out of a sow's ear'.

“What we’re proposing is nothing different. No LPT payer has anything to fear in 2020. They’ll be paying exactly the same LPT as 2019.”

Cllr Joe Flaherty (FF), while agreeing with his colleagues, highlighted the fact that local government funding is severely lacking.

“This is a masterpiece of finance. But it hides a deficiency in local funding,” he said.

“The local government is under funded and that needs to be looked at. This scheme wouldn’t have happened if it weren’t for those who have paid their LPT. They need to be commended most.

“But it shouldn’t be allowed to hide the deficiency of funding in the local government.”

It was agreed unanimously that the Local Property Tax for 2020 would be retained at 2019 levels.