New research from Chambers Ireland reveals that income from development contributions has risen from €0.11 billion to €0.55 billion between 2000 and 2005. It now accounts for 13.6% of local government expenditure.
Chambers says this income stream is unsustainable as it is dependent on continued construction growth, which is predicted to fall in the coming years.
Outlining the scale of the problem, Chambers Ireland's Chief Executive John Dunne says that the Indecon report into the financing of local government earlier this year projected that within four years, additional funding of €2 billion will be required for local authority service levels to be simply maintained.
He says that Chambers Ireland is calling on the Government to take advantage of the current favourable economic circumstances to rebalance the tax system in a revenue-negative way with a reduction in total central government tax take of €2 billion.
'In tandem with this, we propose replacing stamp duty with a rebalanced property tax that goes directly to local authorities,' Mr Dunne said.
He says that local authorities should be allowed to fully implement the 'user pays principle' and charge all users of services and producers of waste for the associated services and infrastructures.
The Chambers Ireland research shows that Dublin City, Limerick County and Dun Laoghaire Rathdown had the three highest development contribution charges in 2006. Limerick City, Cork City and Dundalk Town Councils have the highest rates bills this year while Wicklow, Cork City and Cork Country have the highest water bills.
