REGINA - Spring flooding and a new contract for teachers are chipping away at the Saskatchewan government's planned budget surplus.
The provincial government has released its 1st quarter budget update, which forecasts a razor-thin surplus for this fiscal year of $11 million.
That is down from the original prediction of $54.3 million.
The province says disaster assistance costs are up $18 million due to spring flooding, and a new collective agreement for teachers has raised education expenses by $51 million.
On the positive side, the government is spending less than expected on interest payments, and all that spring water has boosted hydro revenues at Crown-owned SaskPower.
The province says the flooding has hit the farm sector hard, but other sectors are performing as well or better than forecast in the spring budget.
