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De-bunking Babinsky

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Winnipeg School Board trustee Mike Babinsky wants everyone to know their school taxes have not gone up -- despite the myth perpetuated by the media and others with an agenda.

Babinsky went through the property assessment rolls to dig out what a variety of well-known ratepayers have been paying in school taxes. He calculated that all but 14 per cent of property owners saw their school taxes drop.

Proof of a conspiracy, a mass deception? Or is it just a sleight of hand by someone deeply implicated in the slippery shell game of education financing in this province?

Stick with me while I "de-bunk" Babinsky.

Fact: Winnipeg School Board taxes have risen dramatically in the last decade, as have the taxes levied by the other (now) five boards in the city.

Fact: The net school taxes -- and, for some, municipal taxes, incredibly -- have been cut by an expensive provincial education tax credit program that costs the public coffers $300 million annually.

But don't let anyone tell you you're paying less. As they say, there's only one taxpayer.

According to a chart compiled by Manitoba Education's schools finance branch, the net school taxes on a house valued today at $175,000 in the Winnipeg School Board catchment have risen in six of 10 years since 1999, falling in three of those years and staying flat one year.

It is important to distinguish "net" taxes from school board taxes. In that decade, the Winnipeg board's tax on that house actually rose 34 per cent -- from $1,668 to $2,231.

The difference between a 34 per cent increase and a net cut of $337 was the product of the provincial government's elimination of its own education levy on residential property and the steep hikes it has made to education tax credits to ratepayers, seniors, farmers and renters.

The see-saw battle that has raged between tax hikes and rising credits has kept school taxes down, but at considerable expense to taxpayers.

And swallow this: The provincial education tax credit has reduced the municipal taxes for some homeowners. If your school taxes are less than the $650 credit, the credit cuts your municipal tab. Babinsky says the tax credit would have cut Coun. Harry Lazarenko's municipal taxes to $77 last year, but for the $250-minimum municipal tax.

The basis of Babinsky's attack is a balance-sheet wizardry the provincial government perpetuates, using the heft of its treasury to lock taxpayers into a charade that obscures transparency in taxation.

The same story has played out, in varying degrees, in all school divisions. And Babinsky accuses the media of deception?

Pull apart the pieces and you'll find school board taxes have risen. Indeed, taxes (before the provincial credit is deducted) in three divisions outstrip the city's take from property. That's a real problem for a municipality trying to maintain a tax rate freeze while filling in potholes, building a new sewer and water system and policing the streets -- things legitimately tied to a tax on property.

Net school taxes have dropped since 1991, but only at significant cost to the taxpayer. How much? Well, aside from the $300 million paid out annually in education tax credits, the provincial school levy that was eliminated in 2005 was valued at $100 million in 2001.

I don't blame the school boards in this game -- they balance rising costs with their legal power to tax using an authority bestowed upon them by a provincial government that refuses to shoulder the expense of schools.

All of this to avoid doing the right thing, which would be to phase out the school board taxing authority and assume responsibility for funding schools entirely from provincial tax revenues, as is done in almost every other province.

But the province would also have to take on responsibility for negotiating with teachers -- the lion's share of public school costs -- and then would have to explain the wage increases to the public.

Since the day it took power, the NDP administration has claimed it couldn't afford to supplant school board tax revenue with provincial money.

Yet in 1999, the total haul -- residential and commercial -- from all Manitoba school boards' levies was $402 million. That's almost exactly the combined cost of eliminating the provincial school tax on residences and hiking the education tax credit program.

Phasing out the taxing power of school boards over 10 years was possible.

Today, the boards pull in $700 million.

In another 10 years, how do you think the numbers will stack up?

Republished from the Winnipeg Free Press print edition February 20, 2010 H6

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