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Foothills municipalities pleased to see provincial funding hold for 2021

Okotoks, Foothills County pleased to see MSI funding hold for 2021 but wary of reductions in 2022, 2023.
Okotoks Municipal Centre 2021 BWC 8902 web
Okotoks CAO Elaine Vincent said it's difficult to fiscally plan while the Province's funding amounts for MSI or the Local Government Fiscal Framework continue to change from year to year.

Foothills municipalities were relieved to see a hold-the-line provincial budget as far as funding and tax requisitions.

The Province tabled its 2021 budget on Feb. 25, and while Municipal Sustainability Initiative funding is holding steady in 2021 with $1.2 billion being distributed to municipalities, a projected decrease of more than half is anticipated in 2022 and 2023, with $485 million being projected for MSI funding in both years.

Elaine Vincent, CAO for the Town of Okotoks, said cuts to MSI funding were one of the main concerns for the Town as it anticipated the new budget.

“We are glad that the operating grants will continue and we had budgeted for the forecasted drop in MSI capital funding,” said Vincent. “These announcements are not a surprise to us and our fiscal plan has these adjustments built in.”

She said MSI funding was scheduled to be discontinued in the 2021-2022 budgets to be replaced by legislated funding through the Local Government Fiscal Framework (LGFF), but current economic uncertainty led to the Province extending the program as-is with reduced levels of funding in subsequent years.

The LGFF program will now come into effect in the 2024-25 budget year, she said, and the baseline funding for its first year will be $722 million – a decrease from the $860 million that was initially forecasted.

It’s difficult to plan ahead with five and 10-year fiscal plans when the provincial funding amounts continue to shift, said Vincent.

“The goals of the LGFF were predictable long-term sustainable funding,” she said. “Changing the amounts every year is not predictable and makes it very difficult to budget. We still desire legislated commitments to funding so that we also have certainty in budgets.”

There is some good news as far as the provincial education tax requisition, which is added to the total property tax on households, she said.

The Province has indicated it will be frozen at $2.5 billion in 2021-22 in light of residents and businesses still recovering or struggling from the COVID-19 pandemic, a change from the 2020 budget, which indicated the requisition amount would increase annually to account for population growth and inflation.

Each municipality pays a share of the education requisition based on its equalized assessment. For 2021, those amounts are $2.56 per $1,000 of equalized assessment for residential and farmland property, and $3.76 per $1,000 of non-residential.

“We have just received these numbers and do not expect that they will have significant impact on the amount that Okotokians will have to pay to support education, as they should remain consistent with the amount paid last year,” said Vincent.

Foothills County Municipal Manager Harry Riva Cambrin said freezing the education requisition level will result in a slight decrease for the County, as its equalized assessment reduced in 2020.

“In total out of $21.4 million we go down by $90,000,” said Riva Cambrin. “It’s not a significant impact, but it’s better to go down that it is to go up.”

He said the County is more concerned over the projection for MSI funding, which it relies on for capital projects like paving roads, water and utility projects, bridges and upgrades or maintenance to infrastructure and buildings like community halls.

“The impact we’ll see is next year with the loss of more than half the MSI,” said Riva Cambrin. “It will be sort of a maintenance-type situation. You maintain what you have, you won’t be able to increase services or upgrade roads or upgrade utilities.

“You’ll just try to get by.”

Of notable concern is being able to do necessary and costly bridge work, he said.

“We have hundreds of bridge structures,” said Riva Cambrin. “Many of them are aging and need repairs or replacement and they’re very expensive.”

For this year, he said the County is pleasantly surprised to see a slight increase in its MSI funding for 2021, which will allow for some roadwork projects to be done which had been put on the backburner with an anticipated decrease in provincial capital dollars.

He said Family and Community Support Services (FCSS), seniors housing, and library funding were all held steady in a provincial budget that aims to hold the line.

“And that’s what we’ll be doing this year, too,” said Riva Cambrin.

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