Despite some help, Saint John's financial outlook as grim as ever, mayor says

Saint John Mayor Don Darling says new municipal funding figures for 2018 have done nothing to improve his city's grim financial outlook.

Darling says the city's provincial grant is "around what we expected" and that means he won't abandon his call for a new three-year fiscal plan at city hall and an overhaul of the province's assessment system.

That call for reform remains at "the top of the list" for the city, he said.

"We are going to be continuing to talk to government about changing the formulas, changing the approach, so that we have more than a fighting chance of success," Darling said.

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The New Brunswick government released data Friday afternoon showing the tax base and funding grant for all 107 municipalities in the province.

Saint John has the second-largest tax base in New Brunswick after Moncton. But it will receive the largest equalization grant and the largest amount of special "freeze" assistance of any municipality.

'Significant financial challenges'

But Darling says the final tally for Saint John, a grant of $16.6 million and special assistance of $1.2 million, is roughly what officials expected. It won't relieve the financial pressure, he said.

"It puts us about where we expected: not a lot of growth," he said. "We're still going to wake up on Monday morning with significant financial challenges."

Darling has called for cuts to city services of $15 million, or about 10 per cent of total spending, to get the municipal budget back in order. He also wants to "push as aggressively as we can" on tax revenue in the short term, he said.

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The special assistance, new this year, is for municipalities that have seen their property tax revenue shrink as a result of a freeze on assessments.

The Liberals imposed the freeze, which will last only one year, after widespread errors in Service New Brunswick's new digital assessment system.

Special assistance

Only municipalities that would lose revenue will get the special assistance. Those that see their tax base grow, but at a lower rate because of the freeze, won't get help.

Saint John will get $14.1 million of its total grant under an equalization formula the province introduced in 2013 to redistribute money to the neediest municipalities to create a roughly equal level of local services around the province.

Changing the relationship around taxation remains a very important one for Saint John and I think it's a very important one for other municipalities as well.- Don Darling

But the city's equalization amount would have been even higher if its population had not gone down 3.6 per cent in the last census. This year's funding is the first to incorporate the 2016 population data.

Saint John's population decline means its property tax base per person has gone up, which in turn means it's eligible for less equalization funding than otherwise.

More challenges

Local Government Minister Serge Rousselle said he recognized that the formula, which was written into law in 2013, produced "another challenge" for Saint John's finances.

Moncton, which surpassed Saint John in population in last year's census, will see its overall property tax base go down in 2018, the figures show.

Its base grant will be $2.9 million, with $4 million extra in equalization for a total grant of $6.9 million. The city is not getting any compensation for the freeze.

Earlier this fall, Saint John officials proposed a radical overhaul to the city's property tax relationship with the province. They want the province to abandon its taxation of property in the city and give the municipality more freedom to set its own rates.

Darling said Friday's figures for 2018 don't change the city's need for an overhaul.

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"Changing the relationship around taxation remains a very important one for Saint John and I think it's a very important one for other municipalities as well," he said.

"So the tax reform and tax fairness document that we put on the table … is still is a topic that's at the top of the list for this city."