City council angry, blunt in condemnation of cuts
The mayors of Regina, Saskatoon and Yorkton are meeting with Finance Minister Kevin Doherty and other cabinet members today in hopes of finding some kind of resolution after the provincial government eliminated grants-in-lieu payments to municipalities.
“Many municipalities have set budgets and that is why there is concern and anger from this council,” Regina Mayor Michael Fougere said following a special meeting of council Monday night. “We need to convey that we are concerned but let us find a way to solve the problem. I hope they are open to a discussion, we certainly are.”
At issue is the removal of the grants-in-lieu of property taxes for SaskEnergy and SaskPower in last week’s provincial budget. The loss of the program, effective April 1, will cost the city almost $11 million this calendar year and each year after. This is the equivalent of a 3.8-per-cent mill rate increase, or the loss of most of the winter road maintenance budget.
Across the province, the removal of grants has cost municipalities $36 million.
Looking at possible solutions to the shortfall during Monday’s meeting, council discussed dipping into reserves, cutting back on services and increasing taxes as options for the revenue loss. In regards to a possible increase in taxes, Fougere wanted to make sure residents knew why taxes were increased.
“If we end up coming to a tax increase, then I want a separate line using the term ‘provincial levy,’ ” Fougere said.
“This is so it is clear, as clear as we can make it, that this is the reason why we are charging it.”
When describing the 2017-18 provincial budget, Coun. Bob Hawkins was straight to the point.
“This is a budget that comes like a thief in the night,” he said at an emergency council meeting on Monday night. “It hides in dark corners.”
The provincial government has stated that grants were removed to preserve the municipal revenue sharing grant formula. The PST revenue sharing grant provides just over $40 million to Regina in 2017.
“The reality is that by eliminating grants paid by SaskPower and SaskEnergy ... the revenue that Regina will receive from the province will drop by 20 per cent a year perpetually into the future,” Hawkins said. “This is not preserving funding. This is, by sleight-ofhand, expropriating funding. What the provincial right hand purports to give, the left is taking away.”
The province has stated that cities were told everything was on the table with the budget, including grants-in-lieu. This was something with which Fougere disagreed.
“We did not know about it,” he said to council. “With respect, this was not on the table. Had we known about this, we could have discussed it to come to some kind of arrangement.”
Fougere also criticized the government’s suggestion that the city review how efficient its operations are in order to find savings.
“This administration is looking for $2.5 million in savings above the $11 million we have to look for,” Fougere said, citing the city budget decision to find efficiencies in administration. “We are doing this all the time.”
Hawkins and Fougere were not alone in their sharp criticism of the provincial government’s budget decisions and the alleged downloading of costs to the city.
“Upload all this stuff back to the provincial government,” Coun. Sharron Bryce said. “I’m tired of this.”
“I am not confused. I am scared of the future,” Coun. John Findura said. “Not just of today, but tomorrow. I’m glad SUMA is working on things.”
Coun. Joel Murray criticized the government’s suggestion to use reserves to compensate for the loss. Currently, the city has approximately $213 million in various reserves.
“This is the equivalent of using our savings account to pay our monthly expenses. What happens when the savings are gone?” Murray said.
In speaking on reserves, Fougere questioned whether the province understood how reserves worked and expressed disappointment at the suggestion.
“We use reserves for very important circumstances to keep us sustainable,” Fougere said. “It is prudent financial practice to have reserves. To use reserves to backfill a cut by the province is not the purpose of that reserve.”
Council will now hold a special budget meeting on April 10, after administration has brought back a report on what changes can be made to the 2017 city budget.