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Councillors are happy to see, finally, a pile of revenue coming straight into the council’s bank account: €12 million between now and 2018, to be exact.
This isn’t a huge amount of money when looking at the council’s annual budget, which is roughly €800 million.
But because the money is going straight into Dublin City Council’s coffers – rather than being allocated by the central government – the council has complete autonomy to spend it as it sees fit.
A rare feature of the council’s finances these days. Usually, the Department of the Environment has funding set out to a certain extent.
Decades ago, the council had much more money coming straight into its accounts, and councillors had more power to choose how they spent council funds. It’s an era some of the old-timers still pine for.
And they are on the lookout for ways to raise money directly so they can spend it as they wish. Like bridge tolls, and a hotel bed tax.
Taking Its Toll
The East-Link Toll Bridge’s 30-year public-private partnership came to an end last year, and full ownership was given to Dublin City Council.
Marking the event, earlier this year councillors voted to rename it the Tom Clarke Bridge, after the 1916 leader.
Last year, councillors also used one of their few reserved functions and voted to continue to collect money from the toll bridge and use it as a source of revenue for the council. Cars pay €1.75 to cross the bridge, and this climbs to €5.20 for the heaviest commercial vehicles.
The council’s already decided that the €12 million the council expects to collect from the toll over the next two years will be spent on road infrastructure.
The Tom Clarke Bridge will be upgraded. This will include improvements to the cycleways and the footpaths, which councillors don’t consider very safe at the moment.
Some of the money will also go towards upgrading infrastructure along the quays, including a makeover of the Liffey Boardwalk and an improved traffic-monitoring system.
“The council engineers commandeered the first couple of years’ income,” says the council’s finance committee chairman, independent councillor Ruairí McGinley. “But after that it will be available for a general revenue fund.”
Last December, RTÉ reported that the Automobile Association criticised the councillors’ decision to keep collecting the toll.
But at last Thursday’s finance committee meeting, only independent councillor Mannix Flynn seemed unhappy with the arrangement. He even questioned the legality of continuing the toll. “I think it’s punitive, I think it’s wrong,” he said.
Paddy Bourke, another independent councillor, takes an opposing view. He wishes that more bridges in Dublin required tolls. As he sees it, the council could do with the extra income.
“We decided as a council to continue this operation,” he said. “And I think it was the most sensible thing that we’ve done in all the years I’ve been here on the council.”
Labour councillor Brendan Carr echoed these sentiments, saying that the council’s power to raise money is so limited that councillors should jump at any opportunity to do it.
He said the maintenance of the bridge costs around €200,000 each year, and that the toll income is needed to fund this. Without the toll, people living in the Dublin City Council area would have to fund repairs though many from outside the area use it, he says.
If the toll were gone, Dublin City Council would also lose out on the annual €124,000 that is raised for a local community-gain fund each year. Councillors also fear the local area would be inundated with heavy traffic, because more people would be incentivised to drive into the city.
“Why should we be subsidising people coming in from Dún Laoghaire?” asks Bourke.
More Money, More Power
Dermot Lacey, a veteran Labour councillor for the council’s South East Area, links the loss of councillors’ power to the loss of Dublin City Council’s income from domestic rates.
Up until 1977, when Lacey joined the Labour Party, domestic rates were roughly three times higher than today’s property tax, he says. And this money went straight to Dublin City Council to be spent on the city’s development.
“[Councillors] could decide what happened to that money,” he says.
But when domestic rates were abolished in 1978, Dublin City Council and other local authorities had to rely on the Department of the Environment, which controls local-government finance.
“We get block grants of money from the department and they largely decide how we spend it,” he says. “I wouldn’t mind if they were any good at it.”
The government allocates money for each department within Dublin City Council.
The funds allocated for housing can only be spent on housing. The funds given to the parks section can only be spent on parks, and so on.
This restrains the councillors’ powers significantly.
If there were a little bit of money left in the parks budget and some money left in the housing budget and the council wanted to use it all to build a playground at the end of a new housing estate, they wouldn’t be able to.
Officials would have to go back to the department and ask for approval, says Lacey.
McGinley also says that the change in 1978 hugely affected councillors’ influence. “I’m afraid I’m old enough to remember,” he says. “They essentially allocate all the grants. So power became extremely centralised.”
A Local Property Tax was reintroduced, and that money goes into a central fund before it is divvied out by the finance minister once again. Included in that package is some discretionary funding, but only a portion of the whole. Each year, councillors vote to set the rate of this tax and last year decided to lower it.
In October 2013, the Council of Europe published a report that highlighted the limited powers of Irish local authorities to create taxes or to set rates.
Ireland’s local government is “excessively” centralised, it said, and councils can’t decide what level of services to offer or how much to spend on each.
Ninety percent of revenues have to be used to cover fixed costs and the government’s system of transferring money to less-well-off local authorities is a mystery to council accountants, the Council of Europe found.
The report, Local Democracy in Ireland, recommended that the government give more powers and financial autonomy to councils.
Both McGinley and Labour councillor Mary Freehill are under the impression that Ireland’s system of local government is the most centralised in Europe and is closer to the structure seen in Russia. “That is actually factually correct,” says McGinley.
It’s been nearly three years since the Council of Europe’s report recommended that local governments be granted more powers, but Dublin City Council’s elected representatives are still waiting, and pushing, for change.
At this month’s meeting of the full council, when new Minister for the Environment Simon Coveney, of Fine Gael, spoke to Dublin city councillors about the housing crisis, a handful of them called for their influence and powers to be increased so that they could deal with the crisis.
Coveney did not respond to these requests, and his press office did not respond to questions asking whether he intended to delegate more power to councillors or more freedom to raise and spend money.
For years, councillors on the finance committee have also been looking at bringing in a hotel bed tax.
In 2001, the councillors met with the Department of Finance about the possibility of introducing this measure, but made no progress.
McGinley believes the appetite for this tax was lost somewhat because city-centre hotels started paying extra commercial rates to the Business Improvement District shortly after the meeting.
He estimates that a small tax of between €1 and €2 on each hotel bed, each night would bring in around €4 million to Dublin City Council. It wouldn’t lead to a high enough price increase to send tourists packing for hotels outside the city, he said.
Labour councillor Freehill brought up the idea again recently, as a way to raise money to improve arts-and-culture amenities in Dublin, which might create a virtuous loop: it would be good for the arts, so it would be good for tourism, which would be good for hotels.
“Another interesting thing about it is that a lot of the money would come from visitors outside Dublin,” said McGinley.
But while the matter crops up at meeting after meeting, it’s a levy that is seen as outside of Dublin City Council’s powers, and there is no legislation in place that could allow its introduction.
The Irish Hotel Federation is dead set against the introduction of a bed tax, but did not respond to questions about its views on whether it would like to see hoteliers’ taxes go to local councils rather than central government.
Councillors have decided to leave the issue to one side for six months and get in touch with the government about it. (Perhaps, in the hope that eventually the government might introduce the recommendations of the 2013 report.)
“Again it goes to show how little power we do have. We have the power of the tolls, but there’s no provision in any legislation to impose this tax,” says Fine Gael councillor Paddy McCartan.
He suggests that a tax like this might be a possibility if there were ever a directly elected mayor. “I doubt it’s a priority with national government,” he said.
Back to Reality
McGinley, the council’s finance committee chairman, says he would love to see Dublin City Council find ways to raise revenue.
“We could use the money,” he says. “Essentially we’ve had to shrink our services over the years, so we’d like to be in a position to be able to expand them back again.”
Without devolution, the only way that the council has of raising its own finance is to create a community gain fund for something specific.
“For instance if we wanted a brand-new swimming pool, we could notionally try and raise money for that,” he says. “We in Dublin City Council have never done that though.”
Otherwise, he doesn’t see much scope in law or much desire from the public for more levies that might raise money directly.