Res #: 20-06M
Responses Received: No
Departments: Office of the Premier of Saskatchewan
Resolution No. 20-06M
WHEREAS, at one time, the Province of Saskatchewan was financially responsible for all costs associated with the assessment services which were received by all municipalities in the province; and
WHEREAS, prior to 1999, rural municipalities were not responsible for any costs associated with the provision of Royal Canadian Mounted Police (RCMP) services being provided to their municipalities; and
WHEREAS, municipalities are now financially responsible for the provision of assessment and RCMP services to their municipalities and these levies have dramatically increased over the years; and
WHEREAS, other levies and costs which have been further downloaded on municipalities from senior governments include regional library service, and even requests for financial commitment from municipalities for funding towards the capital costs for new health care facilities within their communities; and
WHEREAS, it is felt that our national and provincial economies are substantially stronger now; and
WHEREAS, the economic welfare of rural Saskatchewan is in a financial crisis situation;
THEREFORE BE IT RESOLVED, that our senior governments respond in the affirmative to this economic crisis in rural Saskatchewan by reversing the downloading of assessment, police, regional library services, and health care capital infrastructure funding, and that municipalities no longer be financially responsible for any of these services being provided to their municipalities.
Response from the Honourable Harry Van Mulligen, Minister of Government Relations:
Assessment services for rural municipalities in the province are supplied by the Saskatchewan Assessment Management Agency (SAMA), an independent agency that operates at arms-length from government. SAMA’s field services include revaluations, general property inspections, maintenance reinspections and defence of assessment appeals, for example. These services are of direct benefit to local governments, both municipalities and school divisions. SAMA levies the requisitions on municipalities and school divisions to pay for the agency’s assessment valuation services.
The provincial property tax system is an important source of financing of both municipal services and the provincial education system and is based upon property assessments. Municipalities and local school boards base their taxes on the value of property within their boundaries. It is a way to ensure that owners of property with similar property assessment values pay similar taxes. This source of funding has given municipalities and school boards the autonomy and flexibility to meet their particular local needs and circumstances, while making them directly accountable to local residents for their financial and program decisions.
Assessment funding is based upon who the main beneficiaries are for the assessment and property tax system, including municipalities, school boards and the province as a whole. The Department of Learning has recently introduced funding of $2.5 million on behalf of school boards.
In 1995, the government, in partnership with representatives from the Saskatchewan Association of Urban Municipalities (SUMA) and the Saskatchewan Association of Rural Municipalities (SARM), formed the SUMA/SARM Task Force on Policing and the Administration of Justice. The formation of the Task Force was a direct result of many municipalities asking for changes in the way police costs were recovered.
The objective of the Task Force was to find an equitable and fair way to allocate RCMP municipal police costs. The Task Force considered many options and agreed on the formula that was adopted by the government in 1999. It was understood that the contributions from the participants would pay the entire costs for policing the communities. This formula resolved inequities between municipalities that had to pay for policing services and those that were receiving the same services at no cost.
The ten public library systems are required by legislation to use their provincial grants for resource sharing, to allow all citizens equitable access to library materials and services. Municipal levies paid to regional library boards’ support local services such as staff and books; the decisions about municipal levy rates are made by representatives appointed by municipalities. As in other provinces, municipalities provide the local library building.
The provincial capital funding policy for construction of health care facilities provides 100% funding for eligible costs related to facilities where there is an expectation that they will provide care, not just for local needs, but also for residents from across the province.
Facilities that primarily serve a region’s local population are costshared according to the provincial policy of 65% provincial and 35% local share.
Provincial expenditures on health care continue to grow each year as a percentage of total government spending. It is difficult to recommend further increases in spending to increase the provincial share of the cost-sharing ratio for health capital when the result may be that that spending will crowd out other non-health related provincial priorities.
Rural Revenue Sharing
With the elimination of the Public Health Levy, the Social Assistance Levy and the Hospital Revenue Tax Levy since 1997-98, municipalities have had a substantial gain in expenditure room over the last 10 years. Over the three year period of 2002-03 to 2004-05, government increased revenue sharing funding by 54%. The province announced a further revenue sharing top up (one time) of $12.2 million for 2005-06. Including the 2005-06 fiscal year, all municipalities together will have received $102.2 million more from revenue sharing than they otherwise would have during this time period.
The government also announced a $12.2 million increase in revenue sharing starting in 2006-07. This brings the revenue sharing total to $97.2 million, or a 14.35% increase for 200607.
Government also committed $110 million for the 2005 and 2006 property taxation years for 8% education property tax credits. The province subsequently announced it would further enhance the credit to agricultural land by $52.8 million, thereby establishing an average, province-wide 60/40 province/local education financing split for agricultural land, which will be ongoing and sustainable.
Response from Honourable Len Taylor, Minster of Health:
Premier Lorne Calvert has forwarded me a copy of your November 16, 2006, letter regarding Resolution No. 20-06M, passed at the Midterm Convention of the Saskatchewan Association of Rural Municipalities. I appreciate the opportunity to reiterates the existing policy around the Capital Cost Requirement for Municipalities on Health Care facilities.
The provincial Capital Funding Policy for construction of health care facilities provides 100 per cent funding for eligible costs related to facilities where there is an expectation that they will provide care, not just for local needs, but also for residents from across the province. This includes the tertiary hospitals in Regina and Saskatoon, as well as Saskatchewan Hospital in North Battleford. Facilities in the far north are also 100 per cent provincially funded in recognition of the unique challenges facing these communities.
Facilities that primarily serve a regions’ local population, including those in Regina and Saskatoon, are cost-shared according to the provincial policy of 65 per cent provincial and 35 per cent local share.
Provincial expenditures on health care as a percentage of total government spending continues to grow each year. It is difficult to recommend further increases in spending to increase the provincial share of the cost-sharing ratio for health capital when the result may be that spending will crowd out other non-health related provincial priorities.
Given that there is limited funding available for capital projects, if the province were to consider increasing its share of funding in the future, it follows that fewer capital projects could be undertaken province-wide.
Communities are encouraged to work with their respective regional health authorities and Saskatchewan Health officials, and communicate their concerns and suggestions regarding facility planning and capital project commitments.
I assure you that we continue to work with health regions to make certain that our system provides the best possible services, while keeping health care sustainable into the future.
Response sent from SARM to Honourable Harry Van Mulligen, January 23, 2007:
Thank you for your response to SARM Convention Resolution No. 20-06M regarding financial responsibility for certain services. We would just like to clarify a couple of issues.
Regarding policing, the reply states that “The Task Force considered many options and agreed on the formula that was adopted by the government in 1999.” It should be noted that SARM was not in agreement with the new formula.
And regarding rural revenue sharing, it must be noted that when the Public Health Levy, the Social Assistance Levy and the Hospital Revenue Tax Levy were eliminated after the 1997-98 year, the amount of these levies were deducted straight from the revenue sharing pool.
Reponse from Honourable Harry Van Mulligen, Minister of Government Relations, February 15, 2007:
Thank you for your letter of January 23, 2007, providing views concerning the government's reponse to a Saskatchewan Association of Rural Municipalities (SARM) Convention Resolution regarding financial responsibility for certain services.
With respect to the policing issue, the formula was established to address inequities that were present in the province in 1999. The costs allocation formula resulted in a more equitable sharing of policing costs amongst all municipalities. The implications of the redistribution were reduced costs for urban municipalities with populations betwee 500 and 5,000 that were paying for policing, and increased costs for rural municipalities and smaller urban municipalities that at the time, received policing for free. The formula was established to address this inequity, and ensure that all municipalities, whether they are a large or small urban centre or a rural municipality, pay a portion of the cost for the policing services that they receive.
In the context of the overall financial circumstances for municipalities, the government felt it was necessary to help with the transition to increased costs for rural and smaller urban municipalities. The government decided to provide provincial money to help these municipalities facing the new costs, in order for the municipalities to adjust. These funds were never intended to be provided on an ongoing basis.
With respect to the removal of the Public Health Levy, Social Assistance Levy, and the Hospital Revenue Tax Levy, the revenue sharing pool was reduced at the same time. The reduction in revenue sharing was partly offset by the elimination of these levies, which gave municipalities' additional expenditure room. This provided an additional $176 million province wide of expenditure room over the past 10 years. As we have built the level of revenue sharing back up, this new expenditure room has clearly become a benefit to municipalities.
Hopefully, this provides furth clarification to address your concerns.