Tax-break vow comes up short

Manitobans were supposed to get a $625 tax credit this year to help defray the portion of their property taxes levied by local school boards. That was the pledge Premier Gary Doer made during last year's election.

But this year's tax credit is worth only $600. That's up from the $525 homeowners got last year, but $25 less that the NDP promised.

That has the opposition, real estate agents, business leaders and at least one sharp-eyed taxpayer crying foul.

"I would have just assumed that when you make a promise you fulfill that promise," said Tory finance critic Rick Borotsik. "This is the cornerstone of their tax reductions to residents. A promise is a promise."

Finance Minister Greg Selinger said taxpayers got the same outcome - lower overall education property taxes - because of a $16 million bonus fund paid to school boards who froze taxes.

In a confusing wrangle last spring, many school boards cut positions and dipped into reserve funds to avoid raising taxes so they could qualify for the extra provincial grants. The province had to sweeten the pot to woo several school divisions into a tax freeze. However, about 15 school divisions still raised taxes.

But Selinger said average homeowners in only three school divisions - Swan Valley, Turtle River and Fort la Bosse - ultimately paid slightly more for education on their property tax bills once the credit was factored in.

"We got to the same place but another way," said Selinger. "The objective was to keep education property taxes down. Accomplished."

Selinger pledged to boost the credit by $100 next year, making good on campaign promise's ultimate goal of a $700 tax credit by 2009.

Doer made the campaign pledge in a suburban backyard in Southdale - a riding he visited often during the election to stump for star candidate Erin Selby, a former television news anchor. Selby won the riding, unseating veteran Tory MLA Jack Reimer in a victory the NDP still crows about.

"We are chipping away at the tax burden while enhancing the quality of education," said Doer in a three-page news release from the NDP campaign.

But the Doer government made no mention of the $25 rollback in any of the cascade of fact-sheets, news releases or backgrounders it released when it unveiled its 2008 budget in April.

Virden resident John Fefchak noticed the shortfall when he got his latest tax statement earlier this week. He recalled seeing news coverage of Doer's promise last year, and phoned his municipal tax office to check why he didn't get the full $625 credit. He was told the province had only authorized a $600 credit.

"When I didn't get the $625 I sort of said 'Whoa'. So I dug up the newspaper clipping about the promise which I kept with my tax bills," said Fefchak, a retiree from the air force. "Maybe it was a bit of a pre-election thing to get votes or maybe they counted their money and said we can't afford to do this after all."

Colin Craig, Manitoba director of the Canadian Taxpayers Federation, figured the broken promise saved the Doer government $8 million.

"It looks like taxpayers are owes about $8 million in tax relief if the government is going to keep its promise," said

Lorne Weiss, chair of the Manitoba Real Estate Association, said the notion of a tax credit doesn't make much sense in the first place.

"It's a band-aid solution," said Weiss, who is also the spokesman for a group of business leaders demanding the province stop funding education on property.

maryagnes.welch@freepress.mb.ca

What's the education property tax credit?

It's an automatic credit on your municipal property tax bill that's meant to defray the costs of school taxes, which often account for half your bill and generally go up every year. It's been around since before the Doer government came to power in 1999.

What did Premier Gary Doer promise?

In the 2007 election, he promised to boost the credit to $700 from $400 by 2009. Specifically, he promised to hike the credit to $525 in 2007, $625 in 2008 and $700 in 2009.

What did I get?

You got the $525 last year, but this year you got shortchanged by $25. The tax credit was worth only $600. Next year the NDP promises to make good on the whole promise and set the credit at $700.

Republished from the Winnipeg Free Press print edition August 1, 2008 $sourceSection$sourcePage