Moment with the Mayor: Changes to Revenue Sharing by the Province

Hi Neighbours:

Premier Wall has been in the news recently discussing the effect of falling resource revenues on the upcoming budget. The Premier has also said that one of the items up for consideration is the share of the PST revenue given to municipalities. The stated goal of the government is to have a balanced budget.

Municipalities now receive 20% of PST revenue. This is an agreement that is the envy of municipalities from other jurisdictions across Canada. The intent behind this program is to provide municipalities with a stable and predictable source of funding. We received notice of the amount of this year’s share prior to completing our budget.

What does this mean for Kindersley? The revenue the Town receives from this could be up to $1 million. Should this funding decrease, the Town would have to revisit the budget to either cut the budget, raise taxes, or a combination of both. This is another instance of the province downloading costs onto municipalities. Who is bearing most of the cost of the growth of Saskatchewan? 

Municipalities. How are we coping with this pressure? Municipalities are requiring developers to pay for infrastructure and they, in turn, include those expenses in the cost consumers pay for the end product. This is one of the reasons lots are expensive.

Unlike the provincial and federal government, municipalities cannot run deficits. The only revenue streams municipalities have are property taxes and user fees. Some municipalities, such as RMs, have another stream that taxes large equipment on property.

The Premier stated in the Leader-Post of January 9^th: "The broader context is a tighter budget, we want to balance it, and that means some tough decisions and everything needs to be on the table." I’m wondering if the province realizes that when they say “everything is on the table” it is a very broad scope. They will indirectly determine the level of service the Town could provide, the repairs to the WCEC, new parks, and more. Administration and Council made these budget decisions based on the numbers the province provided to the Town.

I appreciate that the province wants to balance their budget. My question is: Why is the province doing it on the back of municipalities? By reducing funding to municipalities the province reduces the gap between their revenues and expenses. However, to accomplish this municipalities are expected to either increase taxes, reduce services or infrastructure investment. Frankly, how is this balancing the budget?

Please write or phone if you would like me to discuss a particular topic. If you have any questions or comments, drop me a line at the town office or email me at mayorenns-wind@kindersley.ca. You can also check out my blog at http://mayorjohn.blogspot.ca/. I appreciate your feedback.