Everything is on the table, including the revenue sharing formula, premier Brad Wall warns SARM delegates
Saskatchewan’s rural municipalities were told “everything is on the table” as the province contemplates deep budget cuts because of declining oil revenues.
That includes the Municipal Revenue Sharing program, which distributes a portion of provincial sales tax revenue among urban and rural municipalities and northern communities.
Saskatchewan premier Brad Wall told delegates attending the Sask-atchewan Association of Rural Municipalities annual convention that oil prices are half what they were when he spoke to them a year ago.
“The impact is between $600 (million) and $800 million less in revenue to the government, (which is) be-tween a five and seven percent reduction in revenue for Saskatchewan,” he said.
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“A revenue decline of this kind won’t bring the operations of government to a halt, but it is serious and it needs to be addressed and it will be addressed.”
Wall made the comments before the scheduled March 18 provincial budget announcement, which occurred after The Western Producer’s publication deadlines.
He told delegates it will be a balanced budget, which means cuts are coming to government programs.
“Every expenditure must be re-viewed, and that includes revenue sharing,” he said.
Municipalities receive one percentage point of the five percent PST collected by the province, which amounts to $257 million in 2014-15.
Rural municipalities will receive $72.6 million, or 28 percent, of the total with the remainder going to urban municipalities and northern communities.
Wall said the revenue sharing program was introduced to help municipalities share in Saskatchewan’s prosperity.
However, revenue sharing funding has increased by more than 100 percent since the program was introduced in 2007-08, while the money pouring into provincial coffers has increased by only 20 percent.
“There is a bit of a disconnect there,” Wall told SARM delegates.
The premier later told reporters his government is considering freezing revenue sharing dollars, which are at record levels.
However, he also said he may not touch the program at all because it could result in a hike in municipal taxes or reduced infrastructure spending by ROMs.
“It’s the last resort for us as we look at the budget. It would be the very last resort,” he said.
Wall said infrastructure spending will remain intact despite the massive reduction in oil revenue.
SARM president Ray Orb is a little nervous about what might happen to revenue sharing in the upcoming budget, but he was comforted by what he heard from the premier in his speech.
“I didn’t get a sense there would be a big cut to it,” he said.
Orb said RMs depend on that money for infrastructure investment, especially for communities where extensive spring flooding has occurred.
He said all of the province’s resource development occurs in rural areas, and the economy will slow down if those communities have less money to spend on infrastructure projects.
“I don’t think the province wants that.”
