Budget Backgrounder: Easing the Burden on Municipalities

As part of its 1999-2000 budget, the Nova Scotia government has included several measures to ease the burden on municipalities.

SOCIAL SERVICES RELIEF
The province has provided immediate financial relief to Nova Scotia's 55 municipalities with an agreement to reduce municipal contributions to social services. Finance Minister Don Downe today confirmed those contributions by municipalities will be cut by $8.8 million in 1999-2000.

"We recognize the need to work with municipalities wherever we can in these tight financial times," said Mr. Downe. "We all have our fiscal challenges, but we also have a responsibility to the people of Nova Scotia to work together in a reasonable way to improve service."

The reduction, representing a 20 per cent decrease in municipal payments, is part of a municipal-provincial memorandum of understanding signed in 1998. The memorandum addressed several items, including a joint review of municipal and provincial roles and responsibilities and the phasing out of municipal contributions to social services over five years. The $8.8-million reduction announced today, combined with a 15 per cent decrease last year, means municipalities will pay $15.4 million less for social services this year than they did in 1997-98.

FULLY FUNDED EQUALIZATION GRANT
Municipalities will also receive fully funded equalization payments this year. The total grant is $24.3 million, an increase of about $833,000 from last year. This grant is paid to municipalities through a formula that takes into account the cost of delivering standard services and a municipal unit's ability to finance those services from its own resources.

COST-SHARE RATIO FOR NEW EDUCATION COSTS
The government will retain the provincial-municipal cost-sharing ratio for new education expenditures at 90:10. The municipal contribution to education is expected to increase by $2.4 million in 1999-2000 as a result of increased property assessments. The education cost-sharing ratio is one of the items that will be addressed in the review of municipal-provincial roles and responsibilities.