Rates Act to hurt councils

2010-07-26 00:00

THE next phase of the Municipal Property Rates Act (MPRA), which will see government institutions paying reduced rates on their properties, will impact hugely on municipal budgets.

eThekwini municipal manager Mike Sutcliffe said this will mean that schools, hospitals, police stations and government offices will be paying only a proportion of rates, a figure presently estimated at 25%.

He said a town with a large number of schools or other government buildings could see its rates revenue cut to a fraction.

Sutcliffe was speaking at the public hearings on municipalities at the KwaZulu-Natal Legislature on Friday.

He appealed to the finance portfolio committee to look at the impact of introducing the next phase of the MPRA.

He said municipalities will still need to maintain infrastructure, upgrade facilities and keep cities clean.

This will mean that the revenue lost from the government will have to be picked up from ratepayers.

Municipalities “really can’t squeeze our ratepayers anymore. There is a need to find a balance,” he said.

Members of the finance and standing committee on public accounts (Scopa) expressed satisfaction at indications that government departments are paying their debt to municipalities after eThekwini’s chief financial officer, Krish Kumar, announced that the total amount owing has dropped from R950 million to R650 million.

There was further good news after finance portfolio committee chairperson Belinda Scott asked MEC for Public Works Maggie Govender to attend the session with the Durban Metro. Govender confirmed that her department has been meeting eThekwini and has agreed to pay an outstanding amount owing on hostels.

No progress has been made in recovering money owed by Ingonyama Trust, which holds vast tracts of land on behalf of communities in KZN.

The municipality has taken the matter to court.



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