Relief for small businesses as rate hike is avoided

By TONY GALVIN THE county's business community has been spared a commercial rate hike in 2013, as Galway Co Council decided not to implement any increases in recognition of the strained economic circumstances many commercial operations find themselves in. The council's budget for 2013 is €127 million, down six per cent from this year's figure of €135 million. The 2011 figure was €144 million. There was a stand-off between elected members and the executive over a proposed 15 per cent hike in commercial water charges, a move which would have impacted disproportionally on the farming sector. It was agreed that there would be no increase in this area but significant savings had to be made in other areas to make the books balance. One of the most controversial of these is a significant cut in the library books purchase fund. Reflecting the economic realities facing the council, the 2013 Budget was accepted without a vote having to be taken. Tuam Area Cllr Tom McHugh told The Herald that this was an unusually sombre Budget meeting with little of the traditional political game-playing associated with the annual event.[private] 'We are in very difficult times, as can be seen by the drop in funding available to the council. No one was in the mood for going through the motions but there is still widespread concern across the chamber that such a cut in funding will have to manifest itself in a corresponding cut in services to the public,' he said. He added that he and several others members of the council felt a review of how commercial rates were assessed was long overdue. He was happy that there had been a recognition of the dire straits many businesses found themselves in and, as a result, no attempt was made to hike commercial rates. However, he argued that a more flexible system of assessment was needed, possibly one based on profit margins rather than outdated valuations. When council members attempted to bring about a change to the commercial rate policy on the grounds that it was crippling small business, the move was opposed by the council's financial officer. He argued that the vast majority of businesses paid €5,000 or less in rates. This category makes up 83 per cent of all ratepayers. Of the 4,452 businesses paying rates, 3,685 are in the under €5,000 category 1,334 pay less than €1,000 and 1,200 pay less than €2,000. The figures presented show that a rate reduction of one per cent would only result in a saving of 38 cents per week for those with rate bills of €10,000 or less. Since 92 per cent of all ratepayers are in this category, they will pay approximately €8 million this year. Nearly €4 million is paid by large utility companies. This is collected on a national basis and distributed to local authorities around the country. It is estimated that the rates collected in 2013 will be in the €22 million region. Rates make up the difference between what the council calculates as their income and their expenditure. [/private]