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Politics - Wall can’t off-load on local gov’t

A recent editorial in the Saskatoon StarPhoenix offered a very important warning for Premier Brad Wall as he heads into what most certainly will be more difficult days for his Saskatchewan Party government.

A recent editorial in the Saskatoon StarPhoenix offered a very important warning for Premier Brad Wall as he heads into what most certainly will be more difficult days for his Saskatchewan Party government.

“It’s dismaying to see the premier of the ‘new Saskatchewan’ quickly revert to the ways of the old as soon as the province’s resource-based economy hits what might be a prolonged rough patch,” the newspaper editorial noted.

What the editorial was referring to was a suggestion from Wall earlier this month that his government might re-consider the commitment he made when he came to power in 2007 to dedicate 20 per cent of provincial sales tax (PST) revenue to municipalities as a way to stabilize municipal financing.

Yet at the first sign of economic downturn, Wall is contemplating reverting back to the same old ways of off-loading on the municipalities.

“In a budget that’s very tight — with revenues flat if not decreasing — we have to look at all the options,” Wall told reporters.

“That would include looking at the spirit and the principle of sharing own-source revenues with municipalities like we had intended and, perhaps, sitting down with municipalities to try to find what the adjustment might be.”

The newspaper editorial specifically noted Wall’s musings is particularly discouraging for Saskatoon and Regina that have already set their up-coming annual budgets based on the $46 million and $40 million, respectively, they anticipate getting from the PST.

But it is equally disheartening for smaller cities and towns throughout rural Saskatchewan because they have even less flexibility.

Sure, “everything needs to be on the table” as Wall deals with oil below $50 US a barrel. But, as the StarPhoenix noted, what the premier is “proposing to do is to off-load costs onto municipal taxpayers who are already shouldering a disproportionate share of the burden associated with the province’s growth.”

In other words, even if you are a booming community like Estevan, Weyburn, Swift Current, Kindersley, Moosomin, Langenburg that has benefited from the oil and potash mine building boom, you suffer as much as community struggling to keep up with the needs of an aging tax base, it appears you are again going to be first in line to solve the government’s revenue shortfall.

It was the way previous NDP governments handled matters — a way often criticized by Wall and his Sask. Party opposition. In fact, it vowed to fight back and did so by removing education property tax on agriculture land.

Now, Wall wants municipalities to either cut services or increase their own taxes (something municipalities were constantly forced to do under the NDP) so he can balance his own provincial budget as the Sask. Party heads towards a provincial election.

As was the case when NDP governments used to pull the same stunt, it’s a cheap way to handle a problem that lacks political fortitude. One might have expected better for the Wall government.

If everything is truly on the table, there are other options — albeit ones that won’t be especially popular, either.

Service cuts to the provincial government — including downsizing of the provincial service where wages account for 70 per cent of the costs — is one idea.

Unfortunately, that would have to mean cuts to education and health spending and we already see the problems in places like nursing homes.

One other option would be harmonizing the PST with the GST — essentially a tax grab as we would be taxing more goods and also services.

Of course, no one likes this idea, either, but this would actually offer more stability for both the provincial and the municipal governments.

And, heaven knows, our municipalities need more stability — not less.

Murray Mandryk has been covering provincial politics for over 22 years.