Why school taxes are about to go up (part one)

OK, so Education Minister Nancy Allan has vanhelsinged the tax incentive grant with a wooden stake through the heart.

What happens next?

Pretty much inevitably, school divisions will either crank up their property taxes, or cut programs. Maybe a little of both, and probably also scrape the bottom of the barrel on what’s left of their reserve funds.

Presumably, Premier Greg Selinger and Finance Minister Stan Struthers turned off some of the cash flow to public education that’s been holding down property taxes.

For the past four years, the NDP has been encouraging and enticing school trustees to freeze their taxes, by offering them extra cash through TIG. The government pumped in $61.4 million of TIG this current school year, and $135 million over the past four years.

What each division received was based on a formula of what they spent over the previous four years. Like everything else in the education formula, it was convoluted, complex and confusing in the extreme. The eligibility and calculation rules seemed to change on a regular basis, there was catch upon catch upon catch, divisions didn’t know from one year to the next what to expect they’d get from TIG, but last March, 33 of 37 divisions accepted TIG and froze their school taxes.

Short version, the expenditure increases in each of those 33 divisions were limited to the revenue from their share of the annual increase in operating grants, their chunk of TIG, and school taxes paid by properties new to the tax rolls, if any.

It’s not just that taxes were frozen. Spending increases were effectively capped, and divisions struggled to maintain the status quo, with little if any wiggle room to make improvements. Feel free to email me with any improvements you’ve seen to your kids’ quality of education in the past four years.

Let’s all take out our copies of the FRAME (Financial Reporting and Accounting in Manitoba Education). If you left it at home, you can find it online here.

If you look at page 42, you’ll see that as of the current school year, the province puts $1,291,828,552 into public education, which is about 65.2 per cent of the $1.96 billion system. That’s the pot of money to which Allan added $25.5 million in operating grants, plus an additional $4 million to start phasing in over the next five years capping class size for kindergarten to Grade 3 at 20 kids.

The money for TIG was rolled into that enormous pot. Each year’s allocation became part of the base operating grant from the province.

But wait, here’s an interesting line in the budget. The education property tax credit is listed at an impressive $178,258,517 contribution to provincial funding of the public education system. Let’s be charitable and call that disingenuous at best — that money reduces the bottom line of your property tax bill, bookkeepers put it in one pocket and take it out of the other, and not a single penny of it is spent on public education.

The real provincial contribution to operating the public school system is closer to 60 per cent than to 65.2.

Whatever.

Getting back to FRAME, the difference in spending this school year over last is $74.9 million, or 3.97 per cent. That’s pretty typical of how much spending has increased in these recent tax-frozen years.

About 85 per cent of the entire budget is payroll, salaries and benefits for employees, the largest and highest-paid part of which is teachers. Any realistic discussion of cuts involves reducing payroll.

Sure, in that other 15 per cent, you could turn down the lights and heat in the schools overnight, you could continue to delay maintenance and repairs of aging schools until they’re beyond saving, you could figure out ways to run the buses a kilometre or two less each day, you could have six kids share a computer terminal instead of four, and you could buy fewer books, if that’s even possible.

You want to reduce spending, you cut jobs, pure and simple.

But wait — the province is capping class size in younger grades, it’s keeping hundreds of potential dropouts in school until they graduate or reach 18, it’s added compulsory phys-ed for grades 11 and 12, it’s diagnosing more kids with special needs and mandating more support for those kids. All of those are good things, but all of them cost more money and require more people on the payroll, not fewer.

Two-thirds of the province’s divisions already have labour peace with teachers through the summer of 2014, at two per cent a year, compared to a minimum of three per cent raises the past decade. That’s a little savings, but there are still increments, some divisions got two per cent by offering better benefits, and as the paragraph above indicates, the system will need more teachers.

So school divisions are left with a gap of about $50 million in increased spending for 2012-2013, which, if there are no cuts, works out to a seven per cent or so increase in education property taxes.

None of which addresses the ongoing bizarre nature of running a public education system at a local level based on the assessed property values of residential and commercial properties within a school division.

Now that we’re into our 13th year of NDP majorities, can anyone explain why, in a socialist workers’ paradise, it’s an equitable public education system when Seven Oaks School Division has the highest property taxes in the city, yet spends less per student than the other five city divisions which all have lower mill rates?