BALANCED BUDGET WILL KEEP SASKATCHEWAN’S ECONOMY STRONG AND STEADY

Budget Delivers Largest Education Property Tax Cut in Saskatchewan History

The Provincial Government today delivered the largest property tax reduction in Saskatchewan history as part of the 2009-10 Budget.

"This budget is designed to keep Saskatchewan's economy strong and steady in the face of the current global economic crisis," Finance Minister Rod Gantefoer said. "We will do so by delivering significant property tax relief, by delivering another $1 billion to build provincial infrastructure, and most importantly, by delivering a balanced budget."

Under the new system, the province will cut and cap education property tax rates (mill rates) by setting province-wide tax rates for each of the three major property classes - residential, agricultural and commercial. The overall amount of tax paid by property owners to fund education will be reduced by $103 million, or 14 per cent, in 2009 compared to last year. This represents the largest education property tax cut in a single year in the province's history. Education property taxes will be reduced a further $53 million next year.

In turn, the Provincial Government will increase funding to school divisions by $241 million this year, to a record $990.5 million. As a result, the province will fund about 63 per cent of the operating costs for Pre-Kindergarten to Grade 12 education, up from last year's provincial funding of 51 per cent.

"A family of four earning $50,000 will realize over $2,000 in tax savings this year, between the income tax cuts announced last fall, the Active Families Benefit for children's activities and today's property tax relief," Gantefoer said. "Overall, we are putting more than $700 million back into the Saskatchewan economy this year through tax reductions, which will help keep our economy strong."

Other budget highlights include:

• $1 billion in capital funding, building on the $1 billion Ready for Growth infrastructure program announced with Budget 2008-09 and the $500 million accelerated infrastructure boost announced in February - for a total commitment of $2.5 billion last year and this year to ensure Saskatchewan has the roads, hospitals, schools and other infrastructure in place to ensure a strong economy;
• $167.4 million in operating grants for municipalities, an increase of $32.3 million or 24 per cent - step one of a two-year plan to base municipal operating grants on the value of one point of the Provincial Sales Tax;
• $200 million over two years for a new Children's Hospital in Saskatoon;
• $358.2 million for road and highway work province-wide, an increase of $86.7 million from 2008-09;
• $1.6 million to hire 30 new police officers - year two of the government's commitment to hire 120 new officers over four years;
• $108.1 million in additional funding for farm income stabilization programs, which includes an additional $102.1 million for AgriStability and $6 million for AgriInvest;
• $25.2 million in additional funding for Crop Insurance, including $20 million in enhancements to implement the recommendations of the Crop Insurance Review;
• $57.8 million for early learning and child care (ELCC), an increase of $12.6 million, for 1,000 new spaces, child care worker training, funding lifts for ELCC service providers and capital for new space development and maintenance;
• $24.9 million for the first installment of a multi-year strategy to make improvements in the child welfare system;
• $23.5 million to enable universities to limit tuition increases to an average of three per cent;
• $16.5 million for annualized enhancements to the Seniors Income Plan; and
• $12.5 million to adjust shelter rates in the income assistance programs in response to the Task Force on Housing Affordability and index shelter allowances and supplements to 70 per cent of average market rate.

Revenue is forecast at $10.7 billion and spending forecast at $10.2 billion.

"We have been cautious in our revenue forecasts due to the high degree of uncertainty in today's economy and commodity price forecasts," Gantefoer said. "The good news is we are better prepared than most jurisdictions to face any challenges - we're forecasting a surplus and we have $1.1 billion in our cash reserve.

"Outside forecasters predict Saskatchewan will lead the country in economic growth in 2009. Balanced budgets are a key part of our government's plan to keep the economy strong and steady."

For more details on Budget 2009-10, go to www.finance.gov.sk.ca or see "Related Documents" at the bottom of this news release.

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For more information, contact:

Lorri Thacyk
Finance
Regina
Phone: 306-787-6605
Email: lorri.thacyk@gov.sk.ca
Cell: 306-526-6793