Municipal funding may be revamped

Premier says the current formula for revenue sharing is outdated

Premier Brad Wall said Tuesday he wants to change the formula for municipal revenue sharing.

That talk will raise alarm bells with municipal politicians, who already this week are expressing anger over Saskatchewan’s 201718 budget.

Wall’s Sask. Party government has had to defend its budget on several fronts since it was released a week ago.

Protests are planned around the province over the decisions to “wind down” the Saskatchewan Transportation Company (STC) and reduce funding for school divisions, libraries and post-secondary institutions.

Monday saw several cities holding emergency meetings to address the province’s plan to impose changes to the grants-in-lieu that Crown corporations have paid to cities in place of municipal taxes.

By doing so, the Saskatchewan government is redirecting roughly $36 million from 109 cities and instead putting that money into provincial coffers.

The Saskatchewan Urban Municipalities Association (SUMA) is considering challenging that move in the court, while SUMA president Gordon Barnhart said that there is no longer a respectful partnership between governments. “Hometowns are handcuffed by limited revenue sources and the inability to run an operating deficit. And now, they are being forced to do the province’s dirty work.” he said.

With his heels still very much close to the fire on that debate, Wall told reporters the province needs “to have a new revenue sharing formula with municipalities.”

How much the province transfers to municipalities under the current agreement is based on one percentage point of the provincial sales tax (PST).

But because the PST was raised from five per cent to six per cent in last week’s budget, Wall says it should not be a surprise that the government wants to change that formula to “one that doesn’t relate directly to one point of the PST, because now one point of the PST means a lot more, something different than it did.”

Basically, that one per cent of the PST represents more money now and the province wants to instead tie the amount of money municipalities are given to how much money the province has available to offer. “Here’s the challenge with how the formula has existed up until now, it’s not reflective of government revenues,” said Wall.

The premier conceded he knew the budget was going to be unpopular. Proof of its unpopularity can be found in the sheer number of protests being planned around the

province this week. Hundreds of STC supporters gathered in front of Regina’s bus depot on Tuesday in an effort to stop the transportation company from being shut down.

As horns frequently honked in support, Tina Friesen explained how she is disabled and relies on the bus service to travel.

“People have every right to be upset,” she said.

Other protests being planned focus on cuts to advanced education (post-secondary institutions are seeing a five-per-cent funding reduction) and the austerity budget in general (the majority of government ministries are getting less money, including school divisions).

The premier is also under attack from those who use provincially funded libraries, as “read-ins” are being planned for around the province. Public libraries in Regina and Saskatoon are having their provincial funding eliminated.

That is expected to save the province $1.3 million, but could also force taxpayers in those cities to cover the shortfall.

Wall said the province had to make difficult decisions. “We didn’t introduce this budget for popularity reasons, we did it because we want to get to balance in three years in a way that keeps the economy strong,” he said.