I was having a cup of coffee in a restaurant with a friend the other day and when paying the bill, she remarked on the cost. A cup of coffee at home would “be a fraction of this”, she said. I reminded her that we had sat in the restaurant for half-an-hour, enjoying the comfort of an attractive space: ‘ a space’, I said, on which there was a very substantial rates assessment imposed by the local authority. And I could not even begin to compute on how many cups of coffee it would take to meet that assessment (I was never any good at sums).
“Oh!”, said my friend, “I never thought of that”.
Rates are a form of taxation hidden from most of us but for which we will shortly be accountable, starting with the €100 property tax. It is a local taxation designed to meet the cost of local services. For the past 34 years this tax has not been imposed on private residences, and the burden has fallen, in urban areas, on business and industrial premises.
Assessments are not made on the profitability or viability of the business or industry, but on an arbitrary valuation placed on the premises, based, more or less, on size and floor-space. And if the owners of these premises carry out any necessary repairs, and incredibly, if they improve the exteriors, the valuation is increased, despite the fact that the urban streetscape may be enhanced by such improvements. Such anomalies are curious, to the ordinary person, but it continues to get curiousor and curiousor, as Alice in Wonderland said.
Rate assessments have continued to escalate during the past decades. And now, in times of recession, little concession has been made to reduced trading.
These are now a significant charge on any enterprise: a charge which has reached the status of a burden for many businesses which are just barely surviving.
Truth to tell, most ratepayers (and that is what most of us ‘property taxed’ people will become in the near future) pay this local taxation with resignation, if not with enthusiasm, because it is a local tax, designed to finance local services. But this begs the question: What are the local services which are now being financed from this funding imposed by local authorities?
In the earlier decades of this State, the department now classified as the Department of the Environment was described as the Department of Local Government and Public Health. It, and the local authorities under its jurisdiction, had a far wider remit than the same authorities have at the present time. These were responsible for many areas of public health, such as the dispensaries and clinics and there was some involvement in vocational education.
Local elected representatives also had far more powers in decision-making than they have today. These representatives gave voluntary service to the community, and except for the mayors of boroughs, received neither fees nor expenses.
Services were extensive, including the gas-lighting of streets and the provision of domestic and industrial gas supplies, and in wartime the commercial sale of coke – a product of the local authority-operated gas works.
These are now historic memories, but what of present-day services which we have come to expect in return for rates?
The collection of household garbage used to be a service provided ‘free’ to most of us (though paid for in the rates). A fee was then imposed but this service is no longer provided by local authorities and has been passed on to the private sector.
The provision of supplies of domestic water is probably one of the most valuable of public services, but we are now told that this will be regionalised, and that local authorities will no longer have responsibility for it. It, too, will be subject to the payment of fees based on consumption, when water-meters are installed. It is a service which businesses and industries are already paying for, separate from the rates.
Planning is a major function and a service provided by local authorities, and although a charge on rates, additional and very often substantial fees are imposed on planning applications. Since construction is now very limited, and prospects for developments in the current climate are remote, the demands on planning departments, and the consequent running costs, must be considerably reduced.
The provision of social housing was also a very important function of local authorities, but these developments have almost ceased, since developers have left a substantial stock of unfinished and unoccupied houses, which can be availed of if required.
There is, of course, the authorities’ existing stock of housing properties which have to be maintained but much of these have passed into private ownership because of various tenant-purchase schemes.
Street lighting and street-cleaning and road maintenance are still services provided by local authorities, though the former is now contracted to the ESB and much of the latter also subject to contract. Both have to be paid for by rates.
So what remains? There is a vehicle for local democracy in the councils to which we elect representatives, who will, we hope, speak on behalf of citizens, reflect their views, identify public needs. But essentially they have little power and the only two areas in which they can, in theory, affect decisions, is the annual estimates of expenditure (in which an annual rate is decided upon) and in the 5-yearly review of the area plan. But both of these areas are so circumscribed that there is little room for any serious revision or adjustment, and in addition so many functions are now exclusive to the executive (reserved functions) that decisions are often taken of which the elected representatives have no knowledge.
But council chambers can still be useful, if expensive, talking-shops, though meetings are costly and elected representatives now receive fees and expenses. All funded by the rates.
So, in essence, we now have public services which are a charge on the rates assessment, but which are subject to double payment in fees (garbage now, water in the near future). We have a local democracy which is little more than a façade. All of which requires suites of well-heated, comfortable buildings and a large bureaucracy to manage. And all of which comes ultimately from those cups of coffee and pairs of shoes, and cartons of milk, and small industries, the trading and making and buying and selling, from which rates are generated.
Yes, it has a sort of Wonderland climate about it!