St. Paul - There was plenty of mixed reaction following the release of the 2020 budget, last week. Some organizations were breathing a sigh of relief, while others are now moving forward dealing with deep cuts to funding.
For Bonnyville-Cold Lake-St. Paul MLA David Hanson, the focus of budget 2020 is clear: “That we are keeping to our plan toward a balanced budget by the end of this first term. I look at the $2.5 billion in debt servicing this year, that can’t be spent on infrastructure or services, we have to get back to balance and start paying down our debt.”
While Hanson acknowledged that there are “projects in the works” for the area, nothing specific was mentioned in the budget for the Bonnnyville-Cold Lake-St. Paul region.
One item that will have an effect on all Albertans is an increase to the Education property tax that is paid to municipal governments through regular property taxes. Funds are pooled in the Alberta School Foundation Fund for distribution to school boards on an equal per-student rate.
“Nobody likes increases in taxes of any kind, but in this case, revenue from education property tax accounts for roughly 44 per cent of the education budget,” explained Hanson. “It’s important that we maintain an excellent standard in education.”
The Education tax supports all public and separate school students and helps pay for basic instruction costs, including teacher salaries, textbooks and other classroom resources, according to the Government of Alberta.
“In Budget 2020-21, the province is collecting about $2.6 billion in education property taxes from municipalities. The annual requisition is now set based on population growth plus inflation,” according to the Government of Alberta website.
According to St. Paul Education Regional Division board chair Heather Starosielski, “There appears to be more flexibility, predictable allocations over three years, less red tape in regards to reporting and administration,” in this budget.
“The process for developing our budget will be better understood once we receive our full funding profile on Monday, March 2, and then on March 9 SPERD will discuss in further detail the impact of the provincial budget in a teleconference with Alberta Education representatives,” said Starosielski. The board should be able to better comment about the budget after March 9.
Municipalities
Town of St. Paul CAO Kim Heyman was happy to see MSI funding was continued for another year, “so that is definitely a relief.”
“Next year, however, it will drop by about $100 million, (provincially),” she added. Due to other changes, Heyman said it appears the town may be competing against much larger cities for “a lot less grant dollars,” when it comes to transportation grants.
“I think the biggest immediate area of concern for us in this budget is the lack of clarity around the Parent Link programming,” said Heyman. “We know that Parent Link funding will end March 31, 2020, and we know there will be some funding for a new program called Family Resilience.”
While the Town of St. Paul has submitted an Expression of Interest to the new funding model it is still unknown how much funding could be received and what kind of programming will be allowed.
“So, we are a month out from the end of Parent Link with no idea how much funding we will receive and what we will be able to do with it,” said Heyman, adding Parent Link fills a real need in the community.
For the County of St. Paul, there are a number of concerns following the release of the budget, according to CAO Sheila Kitz.
She pointed to the increase in Education tax as being one of those concerns. “This will result in increased taxation for our residents, which does not stay in municipal budgets for our services. Therefore, if the municipality requires increased funding for our services residents will get hit with increases in both municipal taxation as well as school tax,” said Kitz.
“The other factor to consider with this type of taxation is that we are required to pay a requisition to the province regardless of whether or not the tax bill is paid by our ratepayers.”
Kitz also pointed to a concern around MSI funding, which has remained as expected for this year, but will likely decrease in the future.
Under the Alberta Transportation department, the Strategic Transportation Infrastructure Program (STIP) has been cut in half, according to Kitz. The county has used this fund for resource roads and bridges, in the past.
“We are happy to see that the province is continuing to fund Agriculture Societies. We do see that the funding for the County’s Agriculture Service Board has been reduced which is a concern for the County’s agricultural services,” explained Kitz.
She noted that the change for rural and smaller urban municipalities to pay for policing will also have an impact to tax collection, and “It will be a waiting game to see if the increase tax collected will result in decreased crime for our area.”
Her final concern has to do with the assessment of Designated Industrial Properties. While changes are not in effect for 2020, the county has concerns that a change in assessment model will affect 2021 and future tax years.
“I think that all the changes throughout the different government departments have potential to really change the way municipalities operate and provide services in the future. I also worry about the sustainability of smaller towns and villages as well as smaller rural municipalities,” said Kitz.
Job Creation
The budget speaks about job creation and getting Albertans back to work, when asked about the province’s approach to getting this accomplished, Hanson said, “We have already seen increases in capital investment due to our reduction in corporate taxation. I think we will see more as the rate continues down to 8 per cent. We need private sector investment to secure good paying jobs. Those corporations and their employees taxes provide a lot of the revenue the province needs to provide services we all want.”
New Taxes
Within the budget, there are two specific new taxes being introduced. The first is a tax on vaping related products, and the second is a tourism levy on short-term rentals.
“The tax on vaping is meant to discourage young people from starting,” said Hanson.
The other new levy affects short-term rentals, which are more commonly referred to as Airbnb. The new tourism levy “is due to requests from adjacent residents and the hotel industry that indicated some misuse of the system,” explained Hanson. “The original intent was for homeowners to temporary rent their own space, (but) many have evolved to permanent short-term rental properties, much like hotels.”
Post-Secondary
Through the budget, it was also announced that the post-secondary system is being reduced by five per cent for the 2020-21 fiscal year.
In St. Paul, one of the larger post-secondary institutions operating is Portage College, and the institution confirmed it will see a significant drop in funds in some areas.
Portage College specific grant information is as follows, according to a media release sent out on Feb. 28. The Campus Alberta grant will see a reduction of 7.1 per cent, which translates to over $1.6 million; Post-secondary Mental Health Grant will decrease by 10.3 per cent, which is a reduction of $20,000; Students with Disabilities will see a zero per cent cut, which means funding will remain at the 2019-20; and the Infrastructure Maintenance Program will be restored to the 2019-20 level at $1.2 million.
“The cut to the Campus Alberta Grant in 2020-21 of -7.1 per cent is larger than we were planning,” said Nancy Broadbent, President and CEO of Portage College. “This level of a cut to Portage’s main source of funding is serious. We will have loss of jobs through attrition and layoffs, reductions in hours of service and program restructuring as well as changes to courses and class sizes.”
Summary
Overall, when looking at the budget, Hanson said it keeps in line with what the United Conservative Party campaigned on.
“This budget keeps us on track to meet the goals we campaigned on. There are many outside forces that affect our budget, including the volatility in oil and commodity prices, as well as the recent Corona virus effects on the world economy. The only thing we can actually control is how we spend.”
