The provincial government kept true to its pledge to rein in spending and as a result Saskatchewan's cities and RMs will be among those feeling the pinch.
As expected, Thursday's budget, which was delivered by Finance Minister Rod Gantefoer, did not include an increase in funding to the municipal operating grants the province provides to cities and RMs.
As part of an agreement that was struck last year, it was expected the province would share one per cent of the Provincial Sales Tax with communities in 2010 after sharing 90 per cent of one PST point in 2009.
However with potash prices tumbling and the government facing a major budget shortfall, they began making overtures that the funding would remain at the 2009 levels for one more year, something that was confirmed in Thursday's budget document.
Mayor Gary St. Onge, who was in Regina for the budget announcement, said the news was disappointing but expected. However he remains hopeful the funding will go to one PST point in 2011, a move that will put an extra $500,000 in the City's coffers.
"I am optimistic because they mentioned again that we will get it in place next year," said St. Onge. "You've got to be happy with that. If you would have said to me five years ago this would be in place, that you can count on it and you can predict it, I would have been pretty happy."
St. Onge noted the budget contained some other, less publicized, cuts that will also have a negative impact on the City's bottom line.
For example the province has decided they will no longer provide any funding to combat Dutch elm disease and West Nile virus. In the past the cities and the province shared any costs related to those two issues.
"It's not big bucks for us, maybe $15,000," he said. "The government would pay half and we would pay half but those things have been taken off. We just heard that at the Saskatchewan Urban Municipal Association meetings. I also understand our enterprise region here has had their budget cut by 25 per cent along with the others in the province."
Cutting spending was one of the major themes of the budget as the government trimmed $121 million, mostly through in-house cuts.
"This budget was built on the principles of caution on the revenue side, restraint on the spending side and a firm commitment to government living within its means," Gantefoer said. "These are the principles Saskatchewan families use to manage their own money and are the principles our government will follow in managing taxpayers' money."
Gantefoer said reductions were realized in 14 ministries and added that there will be lower debt-servicing costs this year, as a result of the government paying down debt by more than $2.6 billion in recent years.
The government has decided to reduce the size and cost of government operations.
"We began this process last fall by managing job vacancies and looking for other efficiencies in government," Gantefoer said. "These efforts are reflected in this budget and will continue as we strive for a smaller, more efficient public service.
"Our goal is to reach a 15 per cent reduction in the size of the public service over four years primarily through attrition, meaning many who retire or move to other opportunities will not be replaced. This will require careful consideration of the workforce to ensure services remain relevant, responsive and affordable for the people we serve."
Although the budget featured a number of cuts, there were some modest spending increase on areas such as health care, social programs and education.
Among the highlights were:
$123 million increase (five per cent) to regional health authorities (RHAs) to provide base funding of $2.6 billion to maintain and improve delivery of health care services to Saskatchewan people;
$10.5 million to begin the process of reducing surgical wait lists and wait times and $7 million for a Patient-First Initiatives Fund, to support the health system in adopting a patient- and family-centered care approach;
$109.3 million, a $10 million increase (10.1 per cent) to Saskatchewan Cancer Agency (SCA) funding for drugs and medical supplies, and operating costs;
$186.5 million to support individuals with intellectual disabilities;
$321.3 million in other income assistance programs, including an increase of $29.9 million to support program utilization;
$182.3 million for Child and Family Services, including $24.5 million for caseload increases, enhanced programming and to develop new child welfare spaces;
$976.5 million for the operating grant for education, representing a $33 million increase to total school division operating funding including property taxes; and
$391.2 million for universities, federated and affiliated colleges, including increases of $16.3 million to help minimize growth in tuition costs.
Overall revenue is forecast at $9.95 billion, with non-renewable revenues expected to generate $2.1 billion, including $1.1 billion from oil and $221 million from potash. The General Revenue Fund surplus is forecast to be $20 million, which includes a transfer of $194.2 million from the Growth and Financial Security Fund, leaving a balance of $510.8 million in the fund. Government public debt will remain unchanged at $4.15 billion.
Much to the relief of Saskatchewan residents there were no major tax increases included in the budget. However smokers and drinkers will have to dig a little deeper as the government raised the so-called sin taxes.
"The only taxes that will increase are on tobacco - up 2.7 cents per cigarette effective midnight (March 24)," Gantefoer said. "We are also reducing the number of tax-free cigarettes that First Nations individuals can buy on reserve - from three cartons a week to one - which will take effect once legislation is proclaimed.
"These two measures will generate $35.7 million in new revenue this year, but more importantly, they will help to reduce smoking and its deadly effects on Saskatchewan people."
The price of spirits, wine and beer in Saskatchewan liquor stores will also see an increase effective April 1, as a result of changes to liquor mark-ups. These changes are expected to generate $18.1 million.
