Businesses in Dublin city could be facing a big rate increase if the Government refuses to compromise on a funding row with the city council.
The issue centres on the loss of €8.4m because of a change to rate liabilities for Irish Water facilities.
Last week councillors refused to pass a number of measures including reduced community funding, rent increases for council tenants and increased tolls on the Tom Clarke bridge known as the East-Link to balance the budget.
Dublin City Council Chief Executive Owen Keegan said these were necessary because of the loss of €8.4m through a re-evaluation of Irish Water rate liabilities.
The Government had compensated local authorities for the loss of rates due on Irish Water facilities once that body became exempt.
However, the Government informed local authorities last month that this funding would now be calculated according to population size and not on the basis of the number of Irish Water facilities in a particular local authority area.
It means a loss of €8.4 million for Dublin City Council while other councils will get an increase.
The parties controlling Dublin city council – Fianna Fáil, the Greens, Labour and Social Democrats are demanding a restoration of the funding.
Lord Mayor of Dublin Paul McAuliffe has written to Dublin Chamber of Commerce indicating that councillors may vote for an increase in commercial rates unless the Government restores the funding.
The Lord Mayor has said he has yet to hear back from the Government.
It is believed that a total rate increase of 3.5% – compared to 1% last year – would be needed.
It would mean increases in excess of €35,000 for some large department stores in the city while chains would face multiple increases.
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