Councils face funding hard-hit

COUNCILS across the Northern Rivers are facing a hole in their annual budgets after being overpaid Commonwealth grants last year.

The Federal Government over-estimated population and CPI growth for 2011/12, leading to an overpayment of more than $52 million to councils around the country.

Northern Rivers councils are now being forced to amend their budgets - and those sailing close to the wind will be forced to take money out of vital services such as road maintenance.

Lismore City and Byron Shire councils are among the worst hit, with Lismore losing more than $300,000 and Byron $130,000. Lismore's loss includes $37,000 that will come out of the roads budget, and with no spare funds to cover the shortfall, it's bad news for an already taxed road system. "Lismore City Council's financial situation was already difficult in balancing the 2012/13 budget, with savings achieved via internal transfer of interest from reserves as well as proposing not to replace leaving staff for three months to make up for the shortfall," Cr Gianpiero Battista said.

Byron Shire is in the unenviable position of having relatively low Commonwealth funding to start with due to a low population base combined with extraordinarily high land values, a factor Mayor Jan Barham said disadvantaged Byron council.

"High land values do not equate to high wages of locals or the ability to fund additional rate increases (and) Byron Shire has a relatively small population base yet it needs to support the 1.4 million visitors its towns open their doors to every year," he said.

Shires Association of NSW president Ray Donald, described the shortfalls as "disastrous for those communities impacted".

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