Towns to get HST, gas cash in new municipalities deal

Just a day before the provincial budget, the Newfoundland and Labrador government has spelled out details of how it will funnel tax revenue to the province's towns.

The provincial government has agreed to start rebating part of the provincial portion of the harmonized sales tax to towns, based on what they pay for goods and services.

As well, government will share gastax revenue with municipalities.

In all, the new measures will mean about $46 million for towns and cities over the next three years.Theadditional funding will be setat $25 million per year after that.

Premier Paul Davis made the announcementWednesday withMunicipal Affairs Minister Keith Hutchings.

"The status quo is not sustainable," Hutchings told reporters.

Municipalities NL PresidentChurenceRogers welcomed the changes.

"To me, that's a great first step," said Rogers, adding that the announcement comes on the heels ofa position paper that MNL members adoptedat theirannual general meeting in Corner Brook.

MNL has been campaigning for a decade to obtain revenue-sharing programs with the provincial government. However, the new plan leaves some issues unresolved.

The one high-priority item that MNL didn't receive is a higher tax on utilities, whichis currentlyset at 2.5per cent.

Capacity support

Existing municipal operating grants will be extended for the next three years, although the current rate of $22 million will not be increased.

Government said it will spend about $1 million over a three and a half year period between Oct. 1, 2015, to March 31, 2019. It will providefunding for three regional service boards to hire regional water and wastewater operators.Additionally, aconsultant will be hired to focus exclusively on ways to reduce the number of boil water advisories.

Government also announced provisions in the provincial Lands Act, to allow municipalities to acquire someCrown lands at market value. This will be phased inover a five-year period.

An advisory committee will be established in the coming months to explore a regional governance structure.

It wasthe third time this week that government has made a significant announcement leading up to Thursday's budget.

On Monday, Finance Minister RossWisemansaid government will eliminate 1,420 positions over the next five years through attrition. On Tuesday,Premier Paul Davis announced plansfor a greater role for private companies and non-profits in long-term care.