Mid-sized Cities Mayor's Caucus chair Jeff Genung’s reaction to Thursday’s provincial Budget: there’s good news, bad news and wait and see.
Genung’s take on the province’s approach is that he’s encouraged to see them listening to what the municipalities have been asking for, in terms of how local governments receive provincial funding.
It all circles around how something called the Local Government Fiscal Framework (LGFF) works.
“The good news there is the work we did as municipalities over the past few years in asking the Province to change to the LGFF is working, I guess,” he said.
“It’s population-based formula that is also tied to the revenues of the province, so the 13 per cent increase is due to the increase in revenues from the provincial budget three years ago. So we have predictable funding there.”
The LGFF program provides capital funding to municipalities to support projects that support local and provincial economic activities. Through the LGFF, municipalities across Alberta share in both increases and decreases in provincial revenues.
The LGFF, a grant shared by municipalities across Alberta, is set to increase by $96 million in 2025. Budget 2025 allocates nearly $2.5 billion over three years to the LGFF. The total amount for the LGFF in 2025 will be $820 million, an increase of $96 million from 2024, or a 13 per cent increase.
An area of finance that has been a sore spot with municipalities, is something called Grants in Place of Taxes (GPOT) – a provincially mandated approach to how municipalities were allowed to levy taxes against provincially-owned buildings.
The Province passed legislation saying the municipalities could only collect 50 per cent of the normal tax amount on provincially-owned buildings.
“That was something we’ve taken exception to,” Genung said, adding that the Province should be paying the same as everybody else.
Genung said a letter he received from Municipal Affairs Minister Ric McIver on Thursday highlighted the fact that that percentage was going up to 75 this year and 100 per cent in 2026-27.
On a broader scale, Genung said Albertans should see it as good news that the personal income tax rate drops from 10 per cent to eight on the first $60,000 of earnings.
“That’s a good thing for household budgets,” he said.
And, as promised, the bad news.
“The flip side is they’re increasing the education property tax," he said. "So landowners will be taxed more for the education property tax portion, which I think is a good thing as far as the Province understands the need for more schools, now they’ve got to fund it."
