The Saskatchewan government announced a five-year tax exemption to recent graduates and cap prescription drug costs for seniors in today’s provincial budget.

The government said it is withdrawing $510-million from its $877-million savings account to make the numbers work.

The budget proposes a $10,000 annual income tax exemption for post-secondary school graduates in each of the first five years they work in Saskatchewan.

That means an estimated $5,500 savings per graduate over the five-year period. The plan is forecast to cost the government $5.8 million in the early going, ramping up to between $34 million and $38 million once fully implemented.

As well, a tuition freeze that the government began in 2004 will be funded again.

The budget also places a $15 cap on the cost of each drug prescription for all seniors, regardless of income.

The program, effective July 1, is forecast to cost $35.7 million in 2007 and $53.1 million annually.

Other tax measures in the budget include the continuation of an 8% cut to the education portion of property tax on residential and commercial property.

The government promises to deepen that cut to 10% if the federal budget passes and the province gets the $226 million in equalization money it has been promised from Ottawa.

Overall, revenue is up nearly 2% over the 2006 budget to $7.87 billion, while spending is up nine per cent to $7.79-billion.

The government is reporting a modest $75 million surplus in the general revenue fund.