Cities and towns across the Saskatchewan can expect to see less money coming from the province in this year’s budget. This follows a reduction in revenue sharing last year and a multi-million cut to grants in lieu of property taxes. This payment applied to buildings like Crown corporation offices.
Revenue sharing is one of the key issues facing mayors and councillors at the Saskatchewan Urban Municipalities Association (SUMA) conference.
“It is my hope that all levels of government and all organizations that depend on public funding will look hard to find savings internally before they go ask the taxpayers for more money,” Premier Scott Moe told a packed convention hall.
Last year, revenue sharing was reduced by $13.8 million dollars to $257.8 million. Moe said that less PST revenue means there will be around $241 million in the revenue sharing budget this year, a nearly $17 million reduction.
“All of the municipalities, urban municipalities, they’ve been cutting and they’re cut to the bone in terms of finding savings,” SUMA president Gordon Barnhart said.
While a majority of communities have reserves, Barnhart said it would be unsustainable to continuously dip into them.
“Some of the cities will perhaps still have revenue set aside, but those are for long-term projects, crisis, that sort of thing. You can’t operate an urban municipality with a zero balance. You have to have some revenue set aside,” he explained.
READ MORE: Saskatoon property taxes going up 4.7% in 2018
When these cuts were announced last year, municipalities were caught off guard. The effect of this is still being felt as cities like Saskatoon raise property taxes. That city council recently approved a 4.7 per cent mill rate increase, partially attributed to a drop in revenue sharing and grants-in-lieu.
“We still have crowns in cities that are not paying property taxes. Even though we provide fire and service and road access services to those, SaskEnergy in particular,” Saskatoon Mayor Charlie Clark said.
“The more predictability we can have in sustainability and funding for revenue sharing, the more we can plan.”
Moe made it clear that the province does not have extra money. However, the new premier said he wants to renegotiate the revenue sharing formula. Currently, a percentage point from the six per cent PST goes back to municipalities.
In addition to that, Moe wants to find a “fair” solution to the grants-in-lieu issue.
Regina’s mayor, Michael Fougere, welcomed the idea of going to the table with the province to discuss this issue.
“Eight cents of every dollar that’s given by taxpayers to all levels of government goes to municipalities, and revenue sharing will help us of course, but our property tax does not grow with the economy, like GST does or PST or other forms of taxation,” Fougere said.
Regina city council is preparing to debate a 4.86 per cent property tax increase on Feb. 27.
READ MORE: City of Regina proposes 4.86 per cent mill rate increase
“So we are in a pickle in the sense that we don’t have an expanding base of tax to pay for the greater increase of service that we provide,” Fougere said.
Any changes to revenue sharing will not impact the upcoming provincial budget, which Moe said will be revealed on April 10.
The premier indicated this will be another tough budget that continues Brad Wall’s three year plan to get back to balance. However, delegates at SUMA are hopeful that Moe’s offer to talk go to the table and negotiate changes means there will be fewer surprises in this budget.
“We constantly need to reach out and talk to people in the province that may or may not be affected by the decisions that we have so we fully understand the consequences, also understand we are faced with another challenging budget year,” Moe said.
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