Sackville town councillors face raising taxes or cutting services if provincial funding continues to plummet. The province cut the town’s unconditional grant in half between the early nineties and two years ago; the province has halved it again since 2012.
Because another decline in government funding is likely, council treasurer Michael Beal said he expects council will have to make changes to its current budget. The annual grant is intended to fund community needs and endeavours.
“If we can’t become more efficient, we will have to cut out services,” Beal said.
Council has managed to balance its budget with the steady decline of the grant for over two decades. Last year, Sackville’s general operating budget was around $10.1 million. Next year’s projected expenses are around $10.5 million.
After proposing the first draft of the budget last week, Beal and councillor Bruce Phinney said much of the final budget depends on the province.
“Over the years the unconditional grant has definitely been the biggest challenge [to budgeting],” Beal said.
Beal offered a preliminary figure, pending information from the province. “The first draft shows that we would need a six per cent increase in our tax base in order to balance the budget,” Beal said.
A two-page document containing the changes in Sackville’s unconditional grant and its property taxes by classification over the last 20 years was also distributed to councillors.
In the last 21 years, the grant has dropped to nearly 21 per cent of its original value, a change of $803,084.
From 1992 to 2012, the grant was nearly cut in half, dropping from $1,020,269 to $527,734. In the last two years, that figure has dropped to $217,185, and is expected to drop even further next year.
Beal expects a cut of $156,133 in next year’s grant, reducing the grant to just $59,335.
According to the provincial government’s website, “the unconditional grant was established to provide core funding to communities and to equalize their ability to raise revenues.”
The province had not responded to The Argosy’s requests for comment at press time.
With a decline in provincial funding, council may have to increase tax rates, something it has not done since it built the water tower in 2010.