Thursday, March 24, 2005

Crazy Budget by the Saskatchewan NDP

This probably is the worst budget from any provincial governments that I can remember for the last little while.

Government revenue has skyrocketed (exceeding $400 million) due to increase in oil price. But what is the government doing with the extra $$$??

They decided to spend them all, with little infrastructure investments. This budget has:

- nothing for farmers and ranchers
- no tax relieve for taxpayers in any income brackets
- no sales tax relieve
- nothing more for government employees
- nothing for municipalities

In addition, the budget of the communications branch in the Premier's office is up 58% from $856,000 to $1.35 million - which means more PR and spinning for political purposes but anything.

Not to mention that the government has to dip into the "rainy-day fund", withdrawing $145 million from its Fiscal Stabilization Fund, to balance the books - which means the budget is not really balanced.

There is absolutely no vision for the future of Saskatchewan in this budget. All the payoffs from sacrifices made by Saskatchewanians during the Romanow years will soon be "wiped-off" by the Calvert government if they don't change their "spend-it-all like there is no tomorrow" mentality.

Health & Education: NDP government finds more money for health and education

James Wood
Saskatchewan News Network

Thursday, March 24, 2005

CREDIT: Bryan Schlosser, Leader-Post
Thanks to high resource revenue, Finance Minister Harry Van Mulligen found new money for health and education.

With coffers filled by resource revenues, the NDP government released a provincial budget Wednesday that will see spending increase by over $400 million from a year ago.

But even as expenditures reach over $7.1 billion, the government drew sharp criticism for where the money isn't going after a major financial turnaround over the last year.

"I think it's a very solid budget," said Premier Lorne Calvert in its defence.

"It's not a budget that someone will say has huge, huge tax cuts or huge, huge revenue expenditures, it's balanced in that regard. It keeps us living within our means, it puts some money aside, it brings down debt. It's that kind of solid balance we can build on," he told reporters.

In contrast to last year when the government called their budget one of the toughest in a decade, this year they touted a "centennial budget" that builds for the next 100 years.

The budget sees significant increases to health and post-secondary education, including money for a one-time tuition freeze at the province's two universities.

The government also provided a long-awaited boost to social assistance, raising the basic allowance by $10 a month.

But while there were no new tax increases and the government announced a review of business taxes, the NDP drew harsh criticism for not reversing last year's hike to the provincial sales tax or reducing other taxes.

And with the Saskatchewan Teachers' Federation announcing Wednesday that 93 per cent of its membership voted for a mandate that would allow job action, the government also came under attack for not backing off its mandate of zero, one and one per cent wage increases for public sector workers.

"Last year when revenues were down they took your money. This year when revenues are up they are not giving any back. Never before has a government done so little with so much. They should have given something back to the people of Saskatchewan who took it on the chin for the last year. They didn't and that's tragic," said Saskatchewan Party Finance critic Ken Cheveldayoff.

The failure to provide another increase in funding to municipalities after three years of $10 million hikes was met with acute disappointment by both urban and rural leaders.

Both Regina and Saskatoon city councils are currently looking at property tax increases and had pinned their hopes on avoiding a tax hike on new provincial money.

"It's going to make it very difficult for us without having to go back to the property taxpayer," said Regina Mayor Pat Fiacco.

"This provincial government just doesn't get it."

The budget does contain a previously announced $55 million in education property tax relief to finance an eight-per-cent cut to tax bills.

Neal Hardy, president of the Saskatchewan Association of Rural Municipalities, said his hopes for the budget had focused on three areas -- an increase to municipal funding, additional tax relief for agricultural land and by far most important, increased aid to farmers.

None were forthcoming.

"If he had targeted it all into agriculture, we probably would have said that's how it will be and we'd live with that. Because you know, you can only do so much. But they didn't do that, they targeted none of it. They just left rural Saskatchewan out," said Hardy.

"There are many farmers, many of them, that don't have any money to put the crop in ... they're really, really in trouble."

But Finance Minister Harry Van Mulligen said that while the province's financial picture has improved substantially from last year's budget, the revenue in this year's budget is actually 9.2 per cent less than what the province had at its disposal over the course of the last budget year.

In 2004-2005 the province saw a $1.15-billion influx coming mainly from higher-than-expected resource revenues and a large one-time equalization payment from the federal government.

"In terms of our financial position, I think too many people, too many groups are looking at mid-year last year and saying, well, you've got all kinds of money, you can spend it on anything," he said.

The government's revenue projections are based on oil being at US $41.50 a barrel for the rest of 2005 and US $36 for 2006.

But with oil currently over US $55 a barrel, Cheveldayoff said the government is low-balling expectations and will likely have much more revenue.

"Everybody's saying oil is going to stay above $50 a barrel. I haven't heard anyone peg it at $41.50 US like the government has ... I think the government is giving themselves some room," he said.

Under the budget, Saskatchewan Health receives a 7.1-per-cent, or $192-million, increase -- mostly from increased federal health funding -- to a record $2.9 billion while education spending was boosted 6.8 per cent to $1.2 billion.

The latter includes $6.7 million for a one-time Saskatchewan Centennial University Tuition Grant so the University of Saskatchewan and University of Regina will not raise tuition rates this year.

"This is a victory for us," said University of Saskatchewan Students Union president Gavin Gardiner.

"We were looking for a two-year freeze but the freeze was meant only as a stop-gap measure so that we can take a step back and evaluate post-secondary education in the province. If that can happen in a year, then we're happy."

While there was a focus on post-secondary education, foundation operating grants for school boards were frozen at last year's level of $527.9 million.

"That's going to put some pressure on boards of education. Just the fact that the increases such as transportation, energy, all the operating costs, none of those costs are recognized," said Lance Bean, president of the Saskatchewan School Boards Association.

Under pressure from both nominal allies in the anti-poverty movement and its opponents in the Saskatchewan Party, the NDP also raised the basic allowance for the first time in two decades for adults on social assistance.

Bob Pringle, executive director of the Saskatoon Food Bank, said the government has taken positive steps by its increases to housing support, training for low-income people and funding for child-care spaces but it did not go far enough by raising the basic allowance to $205 a month.

"Will it be another 15 years before we see another increase? Quite frankly I was thinking of $20 or $30 maybe two or three years in a row to be a little catch-up," said Pringle, a former NDP cabinet minister.

The government claims this as its 12th consecutive balanced general revenue fund budget but it had to use $145 million from its Fiscal Stabilization Fund to ensure it balances with a $69,000 surplus.

The government also announced it will spend $326.9 million on capital projects.

It enters the budget year with a debt of $11.7 billion, which will be its lowest level in 14 years. The debt is expected to grow again to $12.2 billion in 2008 but the ratio of debt to gross domestic product is expected to continue to decline.

In recent months the NDP has formed a united front with the provincial opposition parties and Saskatchewan's federal Conservative MPs to fight for a new deal on equalization similar to that won by Nova Scotia and Newfoundland which excludes resource revenues from the formula

Calvert said the increase in provincial spending will not hurt the province's argument on equalization.

"It is not a good reason that we shouldn't achieve an energy accord with Ottawa because we've done a good job," he said.

CanWest News Service

© The Leader-Post (Regina) 2005


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