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Property owners struggle to keep up with school taxes
Mar 03, 2006

Lorne Weiss, chair of the Manitoba Real Estate Association’s political action committee, is urging school division trustees to exercise restraint when considering their 2006-07 budgets.

He said restraint in setting budgets is necessary to lessen the impact property taxes have on homeowners, especially those on a fixed income.

Weiss also said trustees should take a more active role in lobbying the provincial government to change the way it funds education.

“The current method of funding education, the status quo, is no longer acceptable and must be changed,” he said during a presentation to Winnipeg School Division trustees.

“As REALTORS®, we often spend more time in other people’s homes than anyone else other than immediate family and we see first hand the impact of the high burden that property taxes are putting on our most vulnerable property owners — our seniors.

“Many are on fixed incomes and are forced to defer maintenance on their single most valuable asset — their home — and watch the value erode as they struggle to keep up with increasing taxes and occupancy costs,” he added.

School boards across the province have until March 15 to finalize their budgets for submission to the provincial government.

Weiss and members of a coalition of 40 groups and associations, including the Winnipeg Real Estate Board, established to lobby the province to reform education funding, said it is particularly important to exercise budget restraint this year because of the new province-wide reassessment.

The reassessment, based on 2003 property values that have increased significantly since the last reassessment in 1999, revealed an average 23.2 per cent increase in assessed values for homes in Winnipeg.

In Winnipeg School Division, the average assessed home value has increased by 18 per cent to $76,475. In its draft budget, the division indicated the average homeowner will pay $976 in property taxes ($936 through the division’s special levy) which is a $30 increase from 2005. When the province’s $400 education tax credit is taken into account, the average home is taxed at a rate of $576.

Winnipeg School Division has proposed a mill rate reduction for 2006 to 27.211 from 30.923 in 2005. But, because of the increased value of the average home this proposed mill rate still raises an extra $30.

“For 2006, the educational portion of the property tax bill for an average house in Winnipeg School Division is expected to decrease by $6 or 0.6 per cent,” according to the division’s draft budget. “This decrease is partly due to an increase in the total assessment base of the province’s initiative to phase out the Education Support Levy on Property taxes.

But, that doesn’t mean that every homeowner in Winnipeg School Division will see their school taxes drop by the $6 average.

According to the division’s own budget document, “If a home’s assessed value increased by more than 18 per cent, there will be a corresponding increase in property taxes based on the assessed value of the house. If the assessed value increased by less than 18 per cent, there will be a corresponding decrease in property taxes.”

The division has benefitted from a 2.8 per cent increase in provincial funding this year and will receive an additional $3.9 million. In total, the province provides the division with approximately 54 per cent of its budget.

The division is also using $3.46 million from its surplus for one-time, short-term and pilot projects.

In Louis Riel School Division, which has set its budget for 2006-07, a home valued at $100,000 in 2005 now has an assessed value of $122,050. The division on its website said the average taxes collected for 2006 through the school division’s levy is $1,253 and the province collects another $55 for a total of $1,308. By decreasing the mill rate, the increase for the average ratepayer will be $5.

The provincial funding increase for Louis Riel was not as high as that for Winnipeg. The suburban division’s funding went up by 0.6 per cent under the provincial formula.

Members of the WREB and MREA have been attending city school division’s budget meetings, bringing the message of restraint.

The 250,000-member coalition Weiss represents wants education to be funded entirely through provincial general revenues.

Approximately 50 per cent of a homeowner’s total property tax bill in Winnipeg now funds education with the remaining 50 per cent used to fund municipal services.

“Health care and social services are funded based on one’s ability to pay (through such tax items as PST and personal income taxes), which is not the case for education,” added Weiss.

“Education is as dear to us as health care ... but you would find it ridiculous to see health care on the property tax bill.”