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The path to fairness
Apr 24, 2009

Whenever Claudia Sarbit talks about education funding, the chair of the Seven Oaks School Board urges all Manitobans not to forget about the students.

Sarbit is not only the chair of the school board, but a member of WinnipegREALTORS® civic and legislative affairs committee, which is urging the Manitoba government eliminate funding education through property taxes. WinnipegREALTORS® as well as the Manitoba Real Estate Association are members of a province-wide coalition representing some 250,000 Manitobans lobbying the province to eliminate education funding through property taxes and instead fund education through the province’s general revenues. The argument is that similar to health care, education is a societal benefit that should be paid for by all Manitobans.

Winnipeg Chamber of Commerce president Chuck Davidson said the long-held position of the coalition is that education is a fundamental service which should be “fairly and fully funded from general revenues.”

The coalition said the best way to serve student needs is through a fair system of funding thorough general revenues.

Although the coalition is committed to having education funding removed from property, Sarbit believes school divisions still need a measure of taxation authority in order to meet the needs of students. She suggested that school divisions should retain at least 10 per cent of the responsibility of education funding through property taxes. At present, about 35 per cent of the costs of education are levied by school divisions — the percentage varies, depending upon who provides the figures.  

According to Sarbit, not all communities are created equal and that means not all school divisions have the same tax base. For example, St. James-Assiniboia School Division has a greater commercial and industrial base to provide tax dollars than Seven Oaks. Homeowners represent 84.3 per cent of the assessment base in Seven Oaks, while they are only 61.6 per cent of the assessment base in St. James. As a result, taxes on a $100,000 home in Seven Oaks are $229.50 more than a similar home in St. James-Assiniboia.

The lowest school taxes are in Gimli-based Evergreen School Division, which also happens to be the riding represented by Education Minister Peter Bjornson. What brings taxes down in Evergreen is its multitude of cottages, retirement condos and industries. Evergreen can draw upon a $280,320 per student  assessment property value, which is the envy of all other Manitoba school divisions. In Winnipeg School Division, the assessed property value per student is $159,763; $222,547 in St. James-Assiniboia; $175,677 in Louis Riel; $151,644 in River East-Transcona; $224,253 in Pembina Trails and at the bottom of the heap is Seven Oaks at $137,631.  

Sarbit said many school divisions in Manitoba are low-cost and high-tax regimes as a result of the disparity in tax bases. Sarbit said Seven Oaks’ cost per pupil is $558 or 5.6 per cent below the provincial average, but has the distinction of having Winnipeg’s highest school taxes.

“The school divisions that raised taxes this year are divisions that have below average expenditure per pupil,” said Sarbit in a letter to the WREN, commenting on an article that Saskatchewan had removed taxing authority from its school boards (March 27, 2009).

“Schools boards (in Manitoba) with growing enrollment and low expenditure per pupil had to make a choice between asking their taxpayers for a little more or giving their students less,” she added.

She called the situation “bizarre,” as the low-cost divisions raising taxes are being labeled as “irresponsible” by those critical of the way school divisions are funded and by Bjornson for telling them to freeze property taxes.

Sarbit said that school boards with higher than average expenditures and declining enrollment generally were able to freeze taxes and take advantage of the Tax Incentive Grant (TIG) provided by the province to those divisions that froze property taxes. For example, Evergreen received the incentive and froze taxes, but spends $616 more per student than Seven Oaks.

“The highest spending school division (in Winnipeg), Pembina Trails, will enjoy a tax freeze,” said Sarbit. “St. James-Assiniboia, with the second-highest expenditure per pupil and the lowest mill rate in Winnipeg, will see a tax decrease. How is this fair?”

Saskatchewan set a province-wide mill rate, resulting in the same taxation rate for all residents of the province. To implement the change, which included removing the taxation powers of individual school divisions, Saskatchewan raised education funding by $241 million annually to $990, drawing money from general revenue. Shortfalls in education program funding for school divisions with smaller tax bases will be made up from the province’s general revenues.

In Manitoba, the latter move would address the problem of divisions with a smaller assessment base such as Seven Oaks.

“We have a dual problem in Manitoba,” Lorne Weiss, a past-president of WinnipegREALTORS® and the chair of MREA’s political action committee, told the WREN. “First 12 of 37 school divisions raised taxes despite a specific request by the province not to do that. And then we have the provincial government saying they’ll think about it (education funding reform) next year. We’d like to remind them that the public made it pretty clear during the last election campaign they wanted this thing resolved now.”

While the coalition questions the need for 37 school divisions with 37 offices, 37 superintendents and nearly 350 trustees making policy decisions, Sarbit said individual school boards are best positioned to address the needs of a community’s student population. She admits the “funding formula is poor” compared to Saskatchewan’s, where “every student ... will have the equivalent resources and learning opportunities. The lesson learned from Saskatchewan and every other province in Canada is simple fairness. A taxpayer is a taxpayer. A student is a student.”

In the end, Sarbit is in agreement with the coalition that education funding as it now exists lacks fairness. Actually, until there is a complete revamping of the education funding formula that removes all taxation powers from school divisions and is funded through provincial general revenues, fairness will always be an issue. The only differences expressed along the road to ultimate fairness is the route to be taken.