The mayor of St. John's says he's disappointed with the money allocated for municipalities in last week's provincial budget.

In the latest budget, Newfoundland and Labrador announced $200 million for towns and cities across the province over the next three years.

Municipalities have been calling for a new fiscal arrangement with the province for years, saying it's unfair that they must rely primarily on property taxes in their communities for income.

St. John's Mayor Dennis O'Keefe said towns and cities were expecting some sign in the provincial budget that there was some change on the horizon.

"It could have been very simple. It could have been something as simple as a first step — a small first step — in rebating the HST," said O'Keefe.

"It could have even been even simpler. It could have been an indication that in the coming year, the province would start taking permits out when they have provincial projects wherever they may have them across Newfoundland and Labrador, [but] there was nothing."

Step in the right direction

According to O'Keefe, any small mention in the budget of a plan to change the fiscal arrangement would have at least served as a sign of good faith, and indicate the intent of the provincial government to look into it in future.

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Churence Rogers says the province still needs to come up with a new fiscal agreement, but the money allocated in the latest budget is a step in the right direction. (CBC)

But O'Keefe said the lack of any mention tells him the province is in no rush to address the concerns of its towns and cities.

Churence Rogers, Centreville-Wareham-Trinity mayor and president of Municipalities Newfoundland and Labrador, said most communities are happy with the $200 million allocation.

While he's pleased with the money coming out of this budget, Rogers said there still needs to be a new agreement worked out between the province and towns sometime soon.

"In terms of the dollars, well you know that there are $800 million in requests that go into the province each year from the municipalities, and $200 million over three years is not going to cut it for the long term," he said.

Rogers said communities will continue to lobby government to make a new agreement.