Sask. premier insists cities use reserve funds to account for budget shortfalls

Saskatooncity manager Murray Totlandhaslikened dipping into municipal reserves to cover a funding shortfall to dipping into an RRSP to buy groceries.

But Premier Brad Wall disagrees.

Speaking to reporters after question period on Tuesday, Wall suggestedthe cities dip into their reserves to help cover their budgetshortfalls an idea that's already been rejectedby both cities.

Regina and Saskatoon are dealing with multi-million dollar funding crunches due to the province scrapping its grants-in-lieu program. Regina is facing a $10.3 million budget deficit, while Saskatoon is facing a $9 million shortfall.

The grants-in-lieu program, which was cut in the most recent provincial budget, saw the Crown corporations SaskPower and SaskEnergytransfer payments to municipalities.

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The premier cited municipal budget documents, and the wording used to describe funding reserves, to bolster his argument on Tuesday.

"It talks about operating deficits," Wall added.

Regina currently has $236 million in its reserve while Saskatoon has $141 million, according to numbers provided by the provincial government.

"The bottom line is [the two cities] are very healthy right now," Wall said.

The premier also referenced comments made by Regina Mayor MichaelFougerein 2003 when he was acouncillor, in which Wall claimsFougeresuggested using reserve funding to mitigate a tax hike.

He also noted reserve funding in Saskatoon and Regina has more than doubled since 2007, in part due to revenue sharing.

Regina received $15.7 million in revenue sharing that year, while they'll receive $40.5 million this year. Saskatoon received $17.8 million in 2007 and is in line to receive $46 million in revenue sharing this year.

"There is no reason the two cities cannot absorb this grant-in-lieu increase without taxes by controlling spending and using a small portion of their reserves," a government spokesperson said in an email.