The City of Summerside is facing a roughly $136,000 reduction in its federal gas tax allocation this year.
Mayor Basil Stewart said that, as he understood the situation, the city will be getting less money than usual from the fund for 2019, but would see gradual increases in its allocation over the next five years to the point where, in 2024, it would be receiving about two per cent more than it did in 2018.
The increases are good news, said Stewart, but he questioned city staff as to why there would be such a big decrease this year.
“For the new council’s first budget, just starting, to get that kind of a letter – it kind of throws a monkey wrench into things when they’re trying to plan to do things for their wards,” said Stewart.
Summerside council is now in its budgeting process, which will be a first for the four new councillors.
The gas tax itself is a federal pot of money that is administered by the provincial government on behalf of the municipalities.
The fund has two components. One is competitive, so municipalities submit projects to the Department of Transportation, Infrastructure and Energy and provincial staff decide which proposals get funded. The second part of the fund automatically goes to P.E.I.’s largest municipalities and is based on their share of the overall population.
Three Rivers entitled to more
Summerside finance director Rob Philpott said he was informed by the province that the decrease in funding is the result of the amalgamation of several communities in eastern P.E.I. into The Town of Three Rivers.
“That’s the main reason,” said Philpott.
With a larger percentage of the Island’s population now within its borders, Three Rivers is also entitled to more of the gas tax, which means an adjustment had to be made to what other communities receive.
Philpott added that, according to the information he’d been given by the province, the reason the city’s allocation will gradually rise again over the next five years is that the total gas tax fund allocation coming to P.E.I. is expected to rise.
The Journal Pioneer reached out to the province for comment but did not receive a response before deadline.
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