Wednesday, February 22, 2012

Some musings on the 2012 BC Budget

Last year the revenues were close to what the budget called for - $41.9 billion versus $42.3 billion in the budget.   The big problem last year came from the increase in spending - $44.4 billion versus $42.9 in the 2011 budget.   That is all from the reimbursement of the HST, which is counted in last year's budget.

If we compare 2012 to 2011 and factor out the HST repayment from last year, total spending will be about $1 billion more in 2012/13 than it was in 2011/12.   This is about a 2.3% increase in government spending.   This increase has all gone to the Ministry of Health, Health Authorities or Post Secondary institutions.   These areas received increases that are equal or above the rate of inflation.

The 2012 budget has a total contingency of $300,000,000, which is less than half the $602,942,000 of last year.

The biggest increase I can see is the Ministry of Community, Sport and Cultural Development which has a 23.4% increase in the general ministry operations budget.  This comes from an increase of funding for local governments.   Local government funding increased by 27.9%, which is an increase of $56,151,000.

Other increases:

  • Solicitor General operations rose by 7.2% +$41,130,000
  • Ministry of Social development rose by 5.1% +$118,317,000 of which $37,800,000 for Community Living and $81,445,000 for income assistance.
  • Ministry of Forests, Lands and Natural Resource Operations has a 4.7% increase in general ministry operations + $16,930,000
  • Attorney General operations rose by 4.3% +$15,098,000
  • Ministry of Health has a 2.9% increase in general ministry operations +$447,193,000
  • Ministry of Education funding transferred to schools is up by 1.3% or +65,988,000.   Much depends on enrollment in the schools this fall.   If overall provincial enrollment falls by more than 1%, the per capita spending per kid in the public school system can rise faster than the rate of inflation.  We have averaged about 0.5% fall in enrollment per year over the last five years in the public system.   Meanwhile private schools have averaged a 0.9% increase in enrollment per year in the last five years.
Decreases:
  • Ministry of the Environment has a 1% cut in general ministry operations - $1,022,000 - $1,000,000 of it from climate action, 20% of that budget.   The Conservation service takes a $22,000 hit
  • Ministry of Jobs, Tourism and Innovation has a 1.3% cut in general ministry operations -$3,060,000
  • Ministry of Finance has a 2.5% cut in general ministry operations - $2,947,000
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