By Andrew de Souza

Province gives city $6.4 million

Mar 24, 2011 | 6:31 AM

The recently announced provincial budget means a $6.4-million cash injection for the City of Prince Albert.

The money comes from the province’s commitment to provide municipalities with one per cent of the provincial sales tax. It’s an increase of about $1.8 million from the previous year’s revenue sharing programing.

It’s good news for the city because last year, it had to transfer a portion of its capital budget to operating funds in order to offset a large tax increase.

The announced money allows the city to keep its budgets in the black, said Robert Cotterill, city manager.

“It means that we’ve got substantially more money to help us with our operating costs,” he said.

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“If they didn’t give us the money, we would have had a deficit in our capital spending and now we can replace that money.”

It means a lot that the province kept its end of the bargain to provide funding to cities, Mayor Jim Scarrow said.

“The confirmation of the full one per cent of the PST is a very meaningful confirmation,” he said.

“It is in our budget, but that’s confirmed today that it is going ahead.”

This year is the first time the province has tied its revenue sharing program to the PST at a full one per cent. In the past different formulas had been used.

The commitment is the right thing to do after years of reductions in funding to municipalities, Minister of Municipal Affairs, Darryl Hickie, said.

“The municipal sector was engaged throughout the consultations and wanted (it tied to the PST),” he said.

“They agreed it was a good solid way to approach the issue, because if the province does better, they benefit. If the province doesn’t do so well, that particular revenue sharing model affects that in a negative way.”

Projections show that the share is expected to grow by about 13 per cent by next year, Hickie said.

In total the province is providing $216.8 million to municipalities across the province.

The city has received about $20 million over the last five years.

adesouza@panow.com