Montague put in its application to the P.E.I. government to expand its boundaries on Tuesday in an effort to increase the town's tax base, at a time when revenues are tight.

On Monday night, the town of Montague presented its $1.25 million budget for the 2013-2014 fiscal year.

Mayor Richard Collins said it has been one of the most difficult years yet to balance the budget.

“We don’t have the dollars coming in in revenue that we should have for this size of a community,” said Collins. “The revenue is just not there.”

Finance Minister Wes Sheridan said Montague and other municipalities should not expect an increase in operating grants from the province this year.

“I don't know what they have put inside their budgets but I would expect it would be no increase,” he said.

The province has its own fiscal problems with a $76-million provincial deficit projected for the end of the fiscal year.

“You have to take a look at our fiscal background, take a look at their balance sheet. When’s the last time a municipality laid anyone off? When’s the last time that they were looking at issues inside their municipality with regard to tax increases,” said Sheridan.

“They’re forcing us to make tough decisions and we’re going to have to make them and it’s not going to help the municipalities,” said Collins.

Montague's plan is to expand the town's borders westward to Victoria Cross, which would allow the municipality to reap taxes from up to 30 more homes as well as some commercial properties. That option will mean public meetings and Island Regulatory and Appeals Commission hearings.

“Well, we don’t have too many options. We’re locked in in Montague on the north side and the south side from two small communities that have their own councils. So they’re incorporated and we can’t move into their territory,” said Collins.

He said it would be much better if the province acted on a four-year-old report put forward by Judge Ralph Thompson on land governance.

Thompson recommended amalgamating 75 communities into just 16 municipalities. The report is still in limbo.

Montague is the second municipality to bring down a budget this spring, with others to soon follow.

Collins said he has heard from other parts of the province that this year money is especially tight and that nearly the whole Island is facing either cuts to services or increases in taxes.