A share of the PST for Municipalities and an increase to the personal tax-exemption in Manitoba were among the highlights as Greg Selinger's NDP government released its pre-election deficit budget Tuesday.

Rosann Wowchuk, Manitoba's finance minister, says tax revenues were up and allowed the province to spend. (CBC)Finance minister Rosann Wowchuk said she will alter the province's municipal funding formula to pump the equivalent of one percentage point of the provincial sales taxes into municipalities.

That means they get $239 million this year, $33 million more than in 2010.

The change gives municipalities a share of the PST that will grow as the economy grows. It also appeases the cry to give cities and towns a stable source funding they've been crying for to deal with crumbling infrastructure.

The government is also increasing the basic personal income tax exemption, upping it by $1,000 over four years.

That means a single parent this year will save $54, increasing to $216 dollars in four year's time.

Deficit to be paid off by 2014: Wowchuk

Tuition fees will rise but will be frozen to the rate of inflation, and hikes to college fees capped at $100. There's more money for universities, 5 per cent a year for the next 3 years.

Smokers lose, as cigarettes will now cost 2 cents more each.

Wowchuk said tax revenues are up and that has allowed the province to spend.

The province is still promising to eliminate the deficit by 2014. Last year, the government altered balanced-budget legislation in order to pass the budget. Documents tabled by the province show a $438-million deficit is forecasted.

Wowchuk admits, the provincial debt is still growing, at nearly $15 billion now. Wowchuk said it's a manageable 26 percent of GDP, down from 10 years ago.

Winnipeg mayor disappointed

Manitoba voters go to the polls in October. Selinger has said he is unafraid of campaigning on a deficit budget.

Winnipeg Mayor Sam Katz, however, said the dedication of PST revenue to municipalities won't mean a boost to their coffers.

"If anybody is fooled into thinking that this is what the city and the [municipalities] has been talking about, — one per cent being dedicated to infrastructure — it is anything but that," Katz said.

Katz called the budget "disappointing" and "ridiculous."

Doug Dobrowolski of the Association of Manitoba Municipalities said he's pleased Manitoba could become the first province to legislate a share of the PST, but the portion is not enough to tackle an $11 billion infrastructure deficit.

"[It] doesn't matter if you are doing roads, water, sewer, bridges — everything just costs so much money these days that we need help paying for all this," he said.

With files from the CBC's Leslie McLaren and The Canadian Press