Reaction to the Thursday’s provincial budget was a mixed bag, with Red Deer seeing some new money, but the public school division will be forced to take a long look at its own budget.
The Progressive Conservative government touted an operating surplus of $2.6 billion in the budget, however the province’s debt will increase to $14.5 billion, borrowing $5.1 billion for capital projects.
For Red Deer Public Schools, having exhausted their reserves filling gaps in previous provincial budgets board chair Bev Manning said they will have to make some tough choices during their budgeting process.
“Reserves are no longer an option. We will manage with this budget, but we will need to make some difficult choices as well,” said Manning.
“There is no increase in funding and we have systematically drawn down our reserves, we’re at the point where we don’t have reserves to draw down from. That means we can’t continue to keep doing everything.
“That means sifting through the operations and trying to find where we can make some savings and some cost cuts. It’s hard to say where they will be.”
Manning called it a hold the line budget, saying they didn’t sustain any cuts but did reinstate some infrastructure maintenance renewal funding cut last year. Red Deer Public Schools could get as much as $300,000 as a result.
Red Deer mayor Tara Veer was encouraged by the increase in the Municipal Sustainability Initiative funding, province-wide at $3.7 billion more. However, she pointed out that this is only for the capital component of the MSI grant. Last year there was an indication to the city that there would be a cut on the operating component.
“In 2014 that was about $600,000, that meant we had a 0.6 per cent tax rate increase on Red Deer’s property tax base to meet that shortfall,” said Veer. “From what we can tell at this stage that means there will be another 0.6 per cent for 2015 shortfall we’ll need to supplement.”
The MSI capital grant gets a $150 million increase over three years, starting from the 2013 budget.
“The city of Red Deer relies on that strongly for our core infrastructure,” said Veer. “The budget included both MSI increases, but also an increase the GreenTRIP funding. GreenTRIP funding is what we use to fund additional transit busses.”
GreenTRIP allows municipalities to apply for funding for capital funding for sustainable public transit infrastructure and technology. The Alberta government has committed $667 million in GreenTRIP funding over through to 2016-17. Veer said the city doesn’t yet know what those numbers will mean for Red Deer.
She also said she will keep an eye on the disaster preparedness and recovery funding in the budget coming out of the June floods and a proposed investment in homelessness, which the budget said will continue to support programs to help house 2,000 Albertans and fund 3,200 spaces in emergency and transitional shelters.
“I’m reserving judgement on how that will play itself out, obviously that’s an issue we continue to have some challenges with in the community,” said Veer.
The budget holds the line for post-secondary institutions on the amount they receive through their operating grant — more than $2.1 billion in this year’s budget. But Red Deer College president and CEO Joel Ward was happy to see the return of the Access to the Future Fund, which was frozen for three years.
“We’re not quite sure how that is going to roll out yet, but we’ll get the details very soon,” said Ward.
There is also money going into apprenticeship and scholarships for new apprentices as well as support for skills trades and training. Ward said that is important as a third of their students are in skills trades programs.
Overall he said the budget had better news than last year, but they are waiting to see the details.
“The key one for us are the Access to the Future Fund, it's back, that’s very positive,” said Ward. “I think they want to take care of the backlog so there will be some matching funds to raise our scholarship numbers for our students.”
Reeve Martin, Red Deer Chamber of Commerce President, reacted positively to the budget pointing to the savings plan, something the Alberta Chamber of Commerce has been asking for and how the increase in operational spending is being outpaced by the province’s growth in the budget. Operational spending increased 3.7 per cent. But the province, inflation plus population growth, grew by 5 per cent.
“The savings plan will be at $24 billion by the end of the year and the Alberta Chamber has been asking for the saving plan for a long time, so they feel the government is following that request,” said Martin. “From our basis we think the budget is pretty positive all the way around. They’re following through on what they’ve saying over the last year.”
Innisfail-Sylvan Lake MLA Kerry Towle criticized what she called a change in how the provincial government delivers its budget with operational and capital budgets being separate. She said this allows the government to report a surplus, but actually run a deficit this year because of its capital budget commitments.
“It’s disappointing to me that this government continues to spin that they’re in a surplus, when in fact they are in a deficit,” said Towle. “There is no way you can be in a surplus and have a balanced budget if you are borrowing almost $5 billion.”
Towle said with the borrowing necessary for the capital side of the budget the province will have about $820 million annually in interest charges.
“Imagine if we lived within our means, didn’t spend more than we take in, imagine what we could have done with $820 million.”
However, Red Deer-South MLA Cal Dallas, and minister of international intergovernmental affairs, called the budget positive, pointing to constraining operation spending growth below inflation plus population growth levels.
“We have an operating surplus,” said Dallas. “The projections we’ve used in terms of both the revenue and the budgeted expenditures reflect what we heard from Albertans and works out very well from a fiscal perspective.”
mcrawford@www.reddeeradvocate.com