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School taxes cash grab 101

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So before I get an email from Oliver Stone about conspiracy theories, let's expand on my story in today's paper and talk about how a school board might use the confusion over reassessment to pull off a cash grab.

Everyone understands assessment bases and mill rates and special levies, right? Come on now, if you don't understand, just put your hand up, like an empowered adult.

School boards decide by March 15 how much money they need to balance their budgets. The province gives them X in operating grants, there are a few small sources of revenue, and what's left has to come from education property taxes, or in eduspeak, the special levy.

The mill rate is the figure -- usually somewhere in the 20s these past few years -- that's multiplied by 45 per cent of the assessed value of your home, or 65 per cent of the assessed value of your business, to get your education tax bill. Yes, yes, yes, Nancy, you then deduct the education property tax credit, but let's not get more confused than everyone is already.

So how do you get the mill rate? I'll be glad to tell you, since I'm one of the very few people outside of the public service who actually gets paid to know.

You take the assessment base -- the assessed value of all the properties within your school division -- and divide it into the amount of money the trustees want to raise through the special levy, your education property taxes.

Pause for breath. Readers may take a refreshment break here.

OK, the action resumes.

The last reassessment was based on 2003 property values. This latest reassessment is based on property values as of April of 2008. They've soared, an average of 73 per cent across the city, says -- no, not according to, I still use a subject and a verb -- Nelson Karpa, city hall's assessment chief. Karpa says that the ballpark figure for single-family residential properties is about 67 per cent on average.

Today's newspaper story told you what that means to your tax bill -- basically, don't panic, as long as your home's value has gone up around the average, your education property taxes should be pretty much the same, give or take a couple of bucks.

The Selinger government has been really leaning on school divisions to freeze property taxes. So let's assume that your local school board is playing ball with the government and is freezing education property taxes.

That means collecting the same amount of money this year through the special levy. And if the same number is divided by 1.00 last year, and by 1.73 this year (the actual assessment base numbers are in the billions, this has been simplified for my lecture), then the resulting figure this year will be considerably smaller. Winnipeg School Division had a mill rate of 28.3 last year, it will be 16.17 this year if there's a tax freeze.

OK, WSD isn't a great example, that board isn't likely to freeze taxes. Let's say Louis Riel S.D., which will drop from 23.5 to 13.74.

Sounds great, eh? Your taxes will plummet, right? Not likely.

If your home's value rose at the average rate, that lower mill rate will be multiplied by an assessed value that's way higher than what it was a year ago, so that should all balance out and your tax bill should be pretty much the same.

So how would a cash grab work?

Some school divisions will decide that they want to maintain jobs, programs and services, regardless what the province wants, and may even want to introduce -- gasp! -- improvements, so they'll increase the money collected through the special levy by two or three per cent, producing a similar increase in the average property tax bill.

That's OK, that's legit, that's not a cash grab. That's a few bucks on your tax bill.

But let's say that a school board decides to grab a few more million that that, or even go into an additional eight figures, on the special levy, to grab some serious coin from school property taxes. Last year's mill rate might have been 26, a tax freeze would drop it to 15 mills, but now the mill rate in the cash grab division is coming in at 17 mills, or 19 mills. The trustees will still point to the mill rate's having dropped, but taxes are going to go up, maybe way up. But in the confusion over reassessment, and how individual changes in value compare to the average in each division, people may think that the change in their tax bill is because of their property's individual reassessed value, and not any conniving.

Not that I'd suggest for a moment that any trustee would contemplate such a dastardly thing, I'm just saying that's how it could be done.

When school boards release their draft budgets, the first thing at which I look is the amount of money they want to collect under the special levy compared to the year before. That's the key to understanding what's happening to education property taxes in each division.

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About Nick Martin

Nick Martin is the old bearded guy at the back of the newsroom, the most experienced reporter at the Winnipeg Free Press, having started his career in Ontario in 1971.

He’s been covering education for the Free Press since the spring of 1997, after decades primarily covering municipal politics, including a four-year stint at the Ontario legislature for the London Free Press.

Nick moved to Manitoba in 1988 with his Winnipeg-born wife, who is a professor at the University of Manitoba. They have two kids, both of whom graduated from Grant Park High School: son Chris and daughter Gillian.

Nick has won a national journalism award from the Canadian Association of University Teachers, two Manitoba Human Rights Journalism awards, and the Ontario Reporters Association investigative award.

Nick is a long-distance runner, having finished and survived 18 marathons and 15 half-marathons and 30-kilometre races, and having (barely) survived 10 years as an outdoor and indoor soccer coach.

Nick became a soccer referee in 2007, delighting in his 60s in outrunning 16-year-olds and keeping his distance from obstreperous coaches and parents.

Nick and his wife have discovered a mutual love for kayaking at their Whiteshell cottage, and are both regulars at the Reh-Fit Centre. They hold season tickets to both the Manitoba Theatre Centre and the Warehouse, and as empty nesters, have rediscovered the joys of an active winter vacation.

A native of Jarrow-on-Tyne, England, Nick is a member of the Toon Army as a Newcastle United supporter, and a proud citizen of Leafs Nation.

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