The provincial government’s plan to cut Municipal Sustainability Initiative (MSI) funding continues to garner reaction from various stakeholders a week after the release of the 2019 provincial budget.
“The reduction is obviously going to be a challenge,” said Olds mayor Michael Muzychka. “The approach that we are going to take is we are going to wait until we know what our actual allotment is going to be, which should be in the next couple weeks, and then weigh everything out then.
“We are in pretty good shape with our infrastructure. We’ve maintained it very well over the years so we don’t have any great needs. We don’t have a huge amount of projects that we need to do. We don’t have a lot of crumbling roads and we don’t have bridges.”
MSI funding has in the past been used by municipalities to fund infrastructure upgrades for such things as bridges.
Released on Oct. 24, the budget calls for cuts to MSI of $94 million in 2020-21 and $142 million in 2021-22.
According to the Alberta Urban Municipalities Association (AUMA), the cuts to MSI will “lead to crumbling community infrastructure or higher taxes for property owners for years to come,” said president Barry Morishita.
Representing cities and towns, including Olds, Sundre, Didsbury and Carstairs, the cuts in MSI funding will create challenges for many municipalities, he said.
“While the province reduces its budget by 2.8 per cent over the next four years, it has proposed reducing our infrastructure funding by almost 10 times that amount,” said Morishita.
“With municipal governments currently facing a multi-billion-dollar infrastructure deficit, these funding cuts will lead to crumbling community infrastructure or higher taxes for property owners for years to come.”
Jason Nixon, Rimbey-Rocky Mountain House-Sundre MLA and Alberta minister of environment and parks, says the cut to MSI is not downloading on urban and rural municipalities.
“We are expecting our municipalities to partner with us on this,” said Nixon. “There’s no doubt we are expecting them to share in the hard work that we have to do as Albertans to get our house in order.
“I disagree that we are just downloading on municipalities. There’s no doubt that municipalities are being called upon to help share in helping get our province back on track.”
Meanwhile, Morishita says the AUMA is pleased that the budget supports municipalities by maintaining critical programs for policing, libraries, Family and Community Support Services (FCSS), and the infrastructure operating budgets for small communities.
“We look forward to further funding details. Despite a lack of consultation from the government on a new municipal funding framework, AUMA will continue to advocate for a framework that supports the province’s financial goals while also meeting the needs and responsibilities of our communities,” said Morishita.
AUMA is disappointed with the government’s decision to replace the City Charters Fiscal Framework Act, he said.
“We also have significant concerns about the extraordinary reduction to Grants in Place of Taxes (GIPOT) for municipalities that are home to provincially-owned buildings and facilities,” he said.
“A reduction in grant revenue equivalent to one per cent of property taxes for a city the size of Edmonton is a substantial impact and could result in downloading provincial costs onto city taxpayers.
“We understand that those municipalities with more than five per cent of their revenue coming from GIPOT will be exempt, which we appreciate."
The Rural Municipalities of Alberta (RMA) association represents 69 rural municipalities including Mountain View County.
“The RMA recognizes the importance of fiscal prudence in these challenging economic times, and while none of us would like to see cuts, we understand the need for the province to make tough decisions to better position Alberta moving forward,” said Al Kemmere, RMA president and Mountain View County councillor.
“We are pleased to see the completion of the Municipal Sustainability Initiative (MSI) funding for 2019-20, noting that municipalities are taking a significant reduction for this funding starting in 2021.
“MSI supports municipal infrastructure projects that contribute to economic growth and job creation, and benefit communities across the province.”
The newly announced Local Government Fiscal Framework “represents continued support and collaboration between the province and municipalities,” he said.
“However, under this new framework, we are concerned that funding will grow at only half the rate of provincial revenue each year, as a predictable funding program should reflect a full connection to provincial revenues,” he said.
“We look forward to working with our provincial partners to solidify sustainable and predictable municipal funding that builds strong communities moving forward.”
