Cities will have to absorb provincial budget cuts
By COLLIN GALLANT on October 25, 2019.
cgallant@medicinehatnews.com
Cities will take a haircut in an Alberta budget that asks them to look in the mirror when it comes to infrastructure and operating spending.
Municipalities will have to absorb a 6 per cent reduction in total operating grants by the end of the 2023, and face a 10 per cent reduction of infrastructure payments starting after next year.
That is required to freeze costs and arrest deficit spending by bringing Alberta back down to national average per-person spending levels, according Finance Minister Travis Toews.
He tabled his first provincial budget that on Thursday, saying that municipalities had a duty to protect taxpayer dollars.
“The McKinnon Report found that municipalities need to shoulder a larger portion of major projects,” he said, citing pre-budget recommendations.
The document itself states that “municipal spending levels directly impact the overall tax burden, and restraint is encouraged.”
Related: Winners and losers in the Alberta budget
The reduction in actual dollars to the City of Medicine could range at about $300,000 annually for operating costs and $1 million when construction grants are adjusted after next year.
That is compounded in the local budget process by an internal move to also find savings to negate inflation to eliminate a structural deficit leftover by the end of natural gas profits several years ago.
Download the budget and related documents
Mayor Ted Clugston said that “it’s not the greatest but it’s within our means.”
“(The budget) is what they’ve been signalling … we kind of expected it, and I’ve said in that past it’s within our means to absorb it,” he told the News on Thursday afternoon, just after the budget release.
“A good government should be able to react to whatever comes. Obviously we’re still working through ‘Financially Fit’ (budget plan), so it couldn’t come at a worse time, but we recognize the province is undergoing some austerity.”
Local administrators have said they would prepare a budget update late this year that considers potential changes to provincial grants that make up about $3 million. A 10 per cent cut might equal $300,000, said Clugston.
The Alberta budget avoided major cuts to large ministries of health and primary education, though little new funding is available to adjust for inflation.
The fate of the large Municipal Sustainability Infrastructure program was also spelled out.
It now provides about $11 million per year to Medicine Hat for construction projects, but will be nine per cent smaller when it is wound up in 2022. Worth $897 million across the province that year, it would be replaced with the $806-million “Local Government Fiscal Restraint Framework.”
IT would be tied to provincial revenue in future years but also exert new control compared to the relatively wide parameters of MSI.
Gone entirely are grant programs that smaller communities accessed for transit upgrades and flood mitigation after the next budget year.
The Community Resiliency Program paid a portion of Medicine Hat’s flood prevention program after 2014.
Councillors recently heard that administrators would this fall provide a final schedule of incomplete projects announced after the 2013 flood. Clugston said a number of local projects are still being examined by the province for funding.
In the operating revenue sphere, grants in lieu of taxes – the system whereby the province pays local property taxes on provincial buildings – will see a 25 per cent cut in each of the next two budget years. Municipalities reacted strongly in 2015 when the province deleted such grants for social housing facilities stating it burdened the private sector tax base.
That move will save $81 million, while the province will also reduce the Alberta Community Partnership grants, and will no longer accept municipal census data to determine per-capita awards.
That provides “more consistent and timely information about Alberta’s population and a fairer allocation of grants,” it states.
Unchanged are operating grants related to MSI, 9-1-1 operations, libraries and the community and family support service grants (which cities distribute to local agencies).
While they are not cuts, the amounts do not rise with an inflation adjustment, leading critics to state it is the same as a cut in terms of adjusted dollars.
One item of controversy in the lead-up to the budget, policing grants to smaller rural communities, will be maintained, though the program is still being reviewed by the justice ministry.
29
-28
Not only have Albertans voted themselves into higher power bills, which will increase their grocery bills also, they will face higher property taxes, just like we saw under the Klein, Stelmach and Redford governments where they tripled the costs to taxpayers. Yet the people in Alaska pay no state taxes, and their property taxes are next to nothing. Albertans have certainly shot themselves in the foot when it comes to believing the lies politicians feed them while they help their rich friends get a lot richer.with our oil wealth.
Maybe Alaska doesn’t have the problems getting their resources to market, maybe their federal government supports resource development and maybe, just maybe, they are not burdened by liberal governments overspending on programs they can’t afford. Take a look at a state like Los Angeles and see what their tax burden is since you think liberals run things so well.
I’m hopeful that the leaders of our small municipality will find ways to live within our means. They’ve been working on Financially Fit for the Future for some time now, so I’m certain that this will aid them in identifying what can be trimmed and what services ought to continue to receive funding. Hopefully any job loss is attrition only, not layoffs or terminations.