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The Kildare North TD has said it may lodge a complaint on the grounds that local property taxes are not distributed fairly between local councils and are leaving towns with growing communities cash-strapped for public infrastructure projects.
Each local council has a baseline, which is the minimum amount of funding each council area will receive from property tax.
The base level is then reinforced with state funding if a municipality’s local property tax revenues are below its base level.
Ms Murphy told the Irish Independent she is now considering filing a complaint with the European Commission because the government has “enormous control” over the tax.
“We have too much local politics at the national level. We do not view local government as autonomous. In other countries they have much greater autonomy and (local councils) are not a branch of central government, but they are treated as a branch of central government,” she said.
She told the Dáil’s public spending watchdog, the Public Accounts Committee, that the way local property tax is distributed constitutes the “biggest scam”.
“People pay a local property tax that is described as local, but it’s not,” she said.
Ms Murphy said the way the tax is distributed is “so complicated” that people “are speechless” when it is explained.
She said local councils have a baseline and, once that is exceeded, funding for projects including road repairs.
” It’s silly. This is why it is complicated.
“If the vast majority of people had any idea what was going on, there would be a bloody riot,” she said.
The Social Democratic Party TD said some local councils with smaller populations and greater “total income” received more in local property taxes.
“It just doesn’t make sense and is not sustainable for local authorities experiencing digital growth. They can’t provide services,” she said.
A working group on the tax said core funding should be allocated based on population, area, levels of deprivation, a local authority’s ability to raise revenue and national policy priorities.
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