Word has it that Saskatchewan municipalities will be looking at a decrease in revenue sharing allocations to local government for 2014-15.
Speaking at a meeting of Battleford town council last week, Mayor Derek Mahon said if the expected three per cent reduction occurs, it will mean about $25,000 less for the Town coffers. The Town was allocated approximately $800,000 for 2013-14, based on a $2,025 base amount, plus $223.17 per capita based on the 2011 census populations.
It won't break the budget, said Mahon, but it is significant.
The Saskatchewan Urban municipalities Association says it has recently learned of new accounting standards in the reporting of the Provincial Sales Tax that will result in the reduction in Municipal Revenue Sharing for 2014-2015. The revenue sharing allocation for local governments is based on one point of the PST as reported by Public Accounts, says SUMA, but in 2012-2013 the total amount collected in PST was $1,284,893,000 - a decrease of $37 million from 2011-2012.
SUMA explains the drop in revenue is mainly due to a requirement from the Public Sector Accounting Board on how the government must report the Saskatchewan Low Income Tax Credit. But while the amount distributed has changed, the percentage distribution remains the same.
SUMA expects the revenue sharing allocation will decrease by $7.453 million from the 2013-14 level of $264, 432,200 to $256,978,600 in 2014-15. It says the government estimates that without this change, the revenue sharing allocation to local governments would have increased by $17 million.
SUMA says when the program was launched as being tied to the PST, initiated in 2009, SUMA accepted that the funding stream would fluctuate with the economy - sometimes up and sometimes down. This change is not implemented by government, and therefore nothing can be done to reverse this outcome, says SUMA.
It will be a change for local governments who, over the past four years, have seen significant increases in revenue sharing, at times in excess of 10 per cent.
