Mayor Gillingham Seeks New Funding Formula

 Gillingham won't be the first mayor to ask for a new funding formula and won't be the last. Mayors have been asking for a share of the sales tax since Duff Roblin. One of the most notable was Glen Murray asking for the change. Every premier NDP or PC has rejected that call. Some like Brian Pallister froze the grant money year after year given to municipalities.

The feeling some in the province have is that the municipalities can't be trusted with their own money. The Feds often think the same about the provinces. The higher governments have a point. Lower governments often cut taxes or spend on things and think they can come back for more. 

The city always wants no strings attached and when they get money pour it into projects like Kenaston and Peguis road expansions while not doing sewer and water improvements. Gillingham has promised not to spend money on legacy projects. He said this to the 2024 Leader's Forum on Growing the Economy at the Canad Inns Polo Park this week.

The city and province give grants to the city which they keep tightly controlled. They don't want the city to have a sales tax, gas tax, liquor tax or any other tax. As long as the city keeps making open requests for capital, it makes the province suspicious. Perhaps if the city articulated a plan for a sales tax specific to sewer and water. However, there is likely going to be sympathy for for some other projects.

The plan is half baked if actual projects and and budgets are not made. The city can't just ask for unlimited funds and then ask for more. That is what the provinces do. Too many times a transfer payment ends up as a tax cut and then province asks for more money.

There may be a case for a 1% new sales tax collected by the province and given to the municipalities. This could generate tens of millions for local spending. Manitoba is in the middle of the country on sales tax. This still wouldn't generate the billion dollars the city says is needed for Peguis and Kenaston expansions but then the city has dozens of these billion dollar projects. They will have to make choices and some of those might be to not to build certain infrastructure. 

The province is looking to cut spending but it is high unlikely they can keep all the Conservative tax cuts. They need to look at tax reform which no one has done in a very long time. And this could help local governments if it can be part of what they look at.