Municipal groups campaign for stable revenue sharing

SASKATOON Two associations representing hundreds of Saskatchewan communities continue to campaign for stability and predictability as the provincial government develops a new formula for funding cities, towns and rural municipalities.

While the heads of the Saskatchewan Urban Municipalities Association and the Saskatchewan Association of Rural Municipalities say they are not expecting a major overhaul, they took care to reiterate their preferences on Tuesday.

“We don’t think there will be any large changes, and we’d be pleased if the formula stayed pretty much the same as it was — which is good for (our) members because of the fact that it’s dependable,” SARM president Ray Orb said.

The provincial government has been similarly cagey, sharing few details of the new formula, which has been under review for months, except to say it will be “long-term” and “linked to the performance of the province’s economy.”

While SUMA president Gordon Barnhart said he anticipates a revenue sharing announcement late this year or early next year, government spokesman Dale Hunter said in an email that “final program changes” will be part of the next budget cycle.

“No final decisions have been made,” Hunter said.

Municipal revenue sharing, a vital source of funds for more than 700 municipalities, is currently benchmarked to one point of provincial sales tax revenue from two years previously, meaning it trails the broader economy.

The formula has been a source of anxiety since the 2017-18 austerity budget preserved it, but slashed $33 million in grants paid to municipalities by Crown corporations, sending some communities scrambling for cash. More recently, the province opted to hike the PST to six per cent from five per cent while freezing the total paid out under the current revenue sharing formula at $241.1 million for two years — after which the new formula will take effect.

While the province has said the freeze will ensure predictability as a new system is hammered out, some officials — including Regina Mayor Michael Fougere — suggested it cuts off the possibility of higher revenues driven by spending.

Revenue sharing is likely to be a popular topic of conversation at SARM’S convention in Saskatoon, which runs through Thursday.