Thursday August 28, 2014

Provincial budget reaction mixed

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The Saskatchewan Party unveiled the financial course for the province for the next year with the release of its annual budget last week.

Finance Minister Ken Krawetz said the budget is again a balanced one aimed at keeping Saskatchewan on the path of steady growth.

“This budget strengthens government’s fiscal accountability, while meeting the challenges of a growing province,” said Krawetz in a prepared release. “It helps secure a better quality of life for all Saskatchewan people and it represents another confident step forward by our government on the path of steady growth.”

It is also a budget without tax increases.

The budget avoids tax increases by controlling government spending, suggested Krawetz.

“Our government’s preference will always be to balance the budget by controlling spending rather than by raising taxes,” he said. “We were able to achieve that once again this year, while still making targeted investments in infrastructure, employment and job training, seniors, students, people with disabilities, children and families.”

A budget surplus of $71 million is forecast, taking into account all Government Business Enterprises including commercial Crown corporations, and Government Service Organizations which include ministries, boards of education and health regions, among others.

Revenue for 2014-15 is projected at $14.07 billion, down 0.7 per cent from last year, while expense is estimated to be $14.0 billion, down 0.2 per cent from last year.

Sunrise Health Region

Local reaction to the budget has been naturally been mixed.

One sector taking a hit is health, and Sunrise Health Region will face a harder time to balance its own budget as a result of the province’s.

The provincial budget announced only a 0.7 per cent funding increase to the region, said SHR chair Lawrence Chomos, and that will be problematic locally.

“We were set back on our heels,” he said.

With less than a one per cent increase SHR officials began last week to consider how best to adjust their 2014-15 budget.

“It’s going to be really difficult to put together a budget by the end of the year,” said Chomos. “… The challenge is unprecedented.”

Locally the situation is made tighter since the SHR is facing a near $1 million deficit this fiscal year.

While the exact impact of the small increase in provincial dollars Chomos said it will require trimming a few million for the local budget.

“The issue are we able to keep up the type of projects we have become involved in,” he said.

Chomos said there is limited wiggle room locally, with 77 per cent of SHR expenditures spent on wages and employee costs, most established via provincial contracts. He said it’s not that they have an issue with wages paid, but added “it’s a reality” they must deal with in a budget.

The budget also has to maintain the core values of the SHR regarding patient care and safety, said Chomos, adding that is always first and foremost in Board decision.

In the end Chomos said the province is offloading some very difficult health care decisions to local boards based on the limited increase announced in its budget.

“This really is unprecedented,” he reiterated. “

It puts a lot of strain on the system.”

Parkland College

By contrast, Parkland College President Dr. Fay Myers was pleased with what the provincial budget contained.

Krawetz announced that Parkland College will receive $4.5 million this year to begin construction of the Trades and Technology Centre in Yorkton. That’s part of the $10 million Premier Brad Wall promised at a news conference at the College’s main campus in October 2013.

“We thank the Government of Saskatchewan for its continued support and encouragement,” said Myers said. “We are eager to begin construction on this incredible project as soon as the weather allows.”

A sod-turning celebration is being planned, but a date has not yet been set.

Elsewhere in the budget, the College received increases for Adult Education programming. The funding will allow the College to deliver additional Adult Basic Education programs and expand on-line delivery of Grade 12 courses.

Myers is also happy to see more help for students in the budget. The province is increasing tax credits for the Graduate Retention Program by $18 million, or 28 per cent. Students can also access some of the $7 million provided for the Saskatchewan Advantage Scholarship and $5 million for other scholarships, including the Saskatchewan Innovation & Opportunity Scholarship fund.

“All this is good news for students and communities in the Parkland Region,” Myers added.

Chamber of Commerce

For others, the budget was about what was expected, with the results being very much holding the course on things.

Don Rae, president of the Yorkton Chamber of Commerce said the budget is one which is very much status quo in terms of its impact on business,

“From the business side of things it could have been worse … I think it’s pretty much in line with what I expected,” he said, adding “I was very glad to see they kept it balanced.”

Asked if balancing budgets was somewhat illusionary given near annual dips into the so-called ‘rainy day fund’ to keep past budgets in the black?

“The fund is there for a reason,” offered Rae, adding he would rather “see them dip in there than take on more debt.”

Rae said in terms of business, he was also happy “there were no tax increases,” adding that included corporate, property and personal. He said any tax increase, even if it were moderate, would have send a negative message and been a drag on the economy.

Rae said he had hoped the province would have moved to the two per cent corporate tax promised, but put on hold in 2013. However, the move was tabled yet again.

The good news, said Rae is the government has said it still wants to make the move.

Had the change been made “it would be a little more cash flow for business,” said Rae, adding the cash could have been used by business “to stimulate some growth.”

City of Yorkton

Yorkton Councillor Randy Goulden attended the budget briefing in Regina last week on behalf of the City.

“I think what we see in this budget, it was a stay-the-course budget,” she said, adding it was reflective of steady provincial growth which “is what we’re seeing in Yorkton too.”

Goulden said seeing the final commitment on the previously announced funding for the Trades and Technology Centre is of course a positive local, as is the possibility some announced housing funding could come Yorkton’s way.

School Divisions

There was good news and bad news in the provincial budget for the Parkland area’s school divisions.

The big ticket item for Good Spirit School Division (GSSD) was funding for Langenburg’s new K-12 school. The government allocated $9.5 million for Langenburg and an elementary school in Gravelbourg. Dwayne Reeve, GSSD director of education, did not know yet exactly what the division of those funds would be, but it will allow the division to start the two-year construction project.

“This will get us through the first year,” he said.

The planning process will be done later this spring and Reeve expects to put the construction phase out to tender during the summer.

Other than that GSSD will face some challenges.

“This is not a status quo budget for us,” he said, noting a .47 per cent increase in operating funding falls short of an anticipated two to 2.5 per cent increase in operating expenses.

“There will have to be some areas where we try to reduce our expenditures,” Reeve said. The school board will be meeting this week to brainstorm solutions. The administration and trustees will take all measures to ensure a minimal impact on the day-to-day lives of students, he said.

Part of the funding shortfall was an “efficiency adjustment” which amounted to a $295,000 reduction in funding for Good Spirit.

For several years the Ministry of Education has been encouraging school divisions to find efficiencies in their operations, but this program of adjustments came as a complete surprise according to Darrell Zaba, director of education for Christ the Teacher Catholic Schools (CTTCS).

For the separate division, the adjustment cost $71,000. Additionally, the Province froze adjustments related to the new funding distribution model introduced in the 2012-2013 budget. That was the year the government set a province-wide education mill-rate and adjusted the funding formula in an attempt to ensure equitable funding across school divisions.

Reeve said the freeze on that program did not impact his division, but Zaba noted CTTCS stood to gain $330,000, which it will not see this year. The implementation of the new distribution model was set for three or four years, however, so the Catholic schools could still see the extra money come through in 2015-2016.

The division did receive an inflationary increase of $480,000 and, all in all, Zaba does not anticipate a major impact on the division’s operations.

“Initially it looks like a status quo budget,” he said, but added there are deliberations yet to be undertaken. “Until we’re able to input all of our expenses, we won’t be able to see how it aligns with the provided funding.”

On the capital side, CTTCS will receive funding for a portable classroom at St. Henry’s Junior School in Melville.

“That was welcome news,” Zaba said.

With files from Thom Barker

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