The Tánaiste says the Government is aware additional funding will be required for local authorities.
He made the comments as the issue of the multi-million-euro budget deficit facing Kerry County Council was raised in the Dáil.
Independent TD Michael Healy-Rae said due to the predicted deficit, he is fearful there will be cuts in basic day-to-day local authority services such as taking care of housing stock and roads.
Deputy Healy-Rae said all local authorities have got so far is a six-month subvention on rates.
Kerry Sinn Fein TD Pa Daly also said he hopes there will be something extra in the budget for local authorities, adding that Kerry County Council has been attempting to drive the local economy.
Tánaiste Leo Varadkar said the issue of local authority deficits is a matter of concern around the country.
He said Deputy Government Chief Whip and Kerry Fine Gael TD, Brendan Griffin has told him the financial gap for Kerry County Council is estimated at about €5 million or €6 million for 2020, potentially rising to €13 million for 2021.
He said that would be a grave situation indeed.
Mr Varadkar said even in a good year, local authorities might only collect 87% or 88% of rates owed but this year they were given 100% from government due to the rates waiver in the second and third quarter.
He said a decision on quarter four commercial rates will be announced in the budget.
The Tánaiste said they are aware that additional funding will be required for local authorities to plug deficits that are arising and it is very much in the mix for the budget.
