Council stalls on Budget 2026 as row over commercial rates plays out

Discussions on Donegal County Council’s 2026 budget will resume in Lifford this afternoon after councillors failed to agree on whether to apply a 5% commercial rates increase.
A proposal to leave the commercial rate unchanged was tabled by Cllr Michael McBride (Independent), who cited conversations with small business owners facing rising costs from other sources and said that “enough was enough” when it came to their council bill.
Cathaoirleach Cllr Paul Canning said officials would now need to produce a revised budget booklet so councillors can see where the €1.8 million that would be foregone if the increase is rejected would be taken from.
The meeting has been adjourned until 3pm to allow that revised document to be prepared.

Read more: Stalemate as councillors adjourned first budget meeting on 21 November

Cllr Ciaran Brogan (Fianna Fáil) said it would be “easy to take the populist stand” and leave the commercial rate unchanged, as has been the case for several years, but argued that councillors needed to be realistic.
He highlighted a number of projects the council was funding in Letterkenny and around the county, noting that businesses in Letterkenny were as concerned about traffic problems as they were about potential rates increases. He said the local authority must focus on addressing roadworks and traffic management to improve the town’s atmosphere and confidence, and to send a clear message that Letterkenny was open for business.
Sinn Féin Cllr Gerry McMonagle said “the elephant in the room” was the broken funding model of local government, and that it should not fall to councillors and officials in Lifford to fix it. He said it was the job of central government to properly fund local authorities, rather than leaving councillors to increase the local property tax and/or commercial rates.
He also said the lack of investment in infrastructure over many years was contributing to the traffic issues faced by Letterkenny.
“It's not populist to vote against this budget,” he said, “and we need to get real about people will get from it.” Any increase in commercial rates, he warned, would feed into price rises for consumers in the county, including groceries, etc, and could lead to job losses in some businesses.
Cllr Joy Beard (100% Redress Party) said she could not support a 5% commercial rates increase because business owners had explained to her the other rising costs they face, including increases in the minimum wage and the forthcoming pension auto-enrolment scheme. Many businesses operate on small margins, she said, and it would be unreasonable to increase the commercial rate given the pressures they are under.
Referring to the imminent closure of the Daniel Doherty Bakery in Moville, Cllr Martin Farren (Labour) said businesses in Donegal’s smaller towns were struggling, and owners had impressed on him the importance of keeping commercial rates down.
Cllr Niamh Kennedy (Independent) also voiced opposition to the commercial rates increase, and noted that the council has not updated its casual trading by-laws - leaving mobile operators free to set up where they wish and pay no rates, giving them an inappropriate advantage over commercial ratepayers.
Echoing points made by council officials when introducing the draft budget three weeks ago, Cllr Martin Harley (Fine Gael) noted that commercial rates in real terms were lower now than in 2008, yet the council was still expected to provide the same level of service.
He asked whether businesses with annual rates bills below €10,000 could be given an enhanced rebate.
Cllr Declan Meehan (Independent) highlighted where some of the €1.8 million in additional income from a rates increase will be spent, including €550,000 on social housing maintenance and €100,000 on public lighting. He said councillors “shouldn’t talk out of both sides of their mouths” by calling for more spending in those areas while voting against a budget that sought to fund them. He supported the 5% commercial rates increase.
The meeting is scheduled to resume at 3pm.
By law, councillors must agree the budget by midnight tonight.