Budget Bulletin: Impact on Municipalities

Nova Scotia's 55 municipalities will collectively be better off financially as a result of the 2002-03 budget and measures announced prior to this budget.

Changes have been made to the municipal equalization program and to Nova Scotia Power Incorporated (NSPI) property taxes. As a result of these program changes, the net impact will be an additional $9.2 million in municipal revenues. Municipalities will also benefit from the completion of a five-year agreement, whereby the province assumes all social services costs. For municipalities, this will result in savings of $6.6 million in 2002-03, as those costs are now paid by the province. Over the life of the agreement, the province has assumed more than $40 million in social services costs from municipalities. All municipalities benefit financially from this change.

Municipalities will now contribute toward the costs of the Atlantic Provinces Special Education Authority, French Special Programs and teacher dental and medical premiums. In previous years, the province paid the complete cost of these programs. These programs form part of the cost of school board funding and should be cost-shared by municipalities.

Municipalities will feel the impact of the elimination of restricted licence plates. This change will cost municipalities approximately $1 million each year. In addition, some provincial funding programs that municipalities access have been reduced. The Local Government Studies Program, Community Grants, and the Provincial Capital Assistance Program have been reduced by a total of $400,000. However, these programs still provide a total of $1.75 million for municipal projects.

Overall, despite the fee increases and increased education costs, municipalities are ahead financially, thanks to the equalization and NSPI property tax changes and the transfer of social services costs to the province.

NOTE: For further 2002-03 budget information, visit the Department of Finance Web site at www.gov.ns.ca/finance .