May 5, 2016

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Telling Tales Out of School

Treating $1.9 billion simplistically

Hey there, time traveller!
This article was published 6/9/2011 (1703 days ago), so information in it may no longer be current.

As impossible as it is to explain Manitoba’s convoluted, complex, confusing, complicated and confounding public education funding formula at a voter’s doorstep, the provincial leaders are trying to flog simplistic funding promises.

The most common you’re likely to hear is 80-20.

That means the provincial government would pay 80 per cent of the costs of public education out of general revenues.

Sounds good, eh?

Liberal leader Dr. Jon Gerrard is saying that, and Tory leader Hugh McFadyen has set it as a goal.

Premier Greg Selinger says the NDP has long exceeded 80 per cent, but his reckoning tosses capital funding, the property tax credit, the farmland tax rebate, and the provincial contributions to teachers’ pensions into the mix.

Let’s just stick to the annual operating costs, which are about $1.9 billion.

Right now, really rounded off, it’s about 60 per cent provincial money, 40 per cent from property taxes.

Whenever I hear someone advocate 80-20, or 70-30, or 90-10, or 100 per cent provincial general revenues, I ask, as I asked Gerrard after the leaders’ debate in front of the Manitoba Teachers’ Society, 80 per cent of what?

Well, of the cost of education, of course, usually comes the reply.

And in a firm 80-20 system, who determines how many dollars and cents make up that 100 per cent? Who decides what the total is each year? How many factors -- the formula, the number of students enrolled, local taxation, contract settlements -- add up to that overall number?

Let’s say that Gerrard expects to spend the same amount of money on public education each year, with some adjustment for cost of living. He has to find an additional $380 million or so in provincial revenues, and education property taxes will drop by $380 million.

Remember, these are round numbers. If I got into all the detail of breaking them down, your brain would hurt really badly.

But let’s say school trustees were still allowed taxing authority, and someone interpreted 80-20 as a commitment of $4 provincially for every $1 raised through property taxes — suddenly, public education has an operating budget of roughly $3.8 billion.

No, that’s not going to happen, but when you toss around simplistic promises, you conjure up all kinds of possibilities and interpretations.

Back to 80-20 on existing spending — who decides how all that money is distributed?

Are provincial grants increased and school property taxes decreased by the existing proportions?

Will this be like Alberta, where the local school boards get a small amount of their budget to spend through local discretion, and the province dictates how most of the money is spent?

Once you lock in a formula that caps local spending, you’ve also locked down school boards’ ability to raise taxes locally for local needs and wants.

That’s started happening already, through caps on administrative spending, through provincial orders to spend contingency reserve funds (a.k.a. surpluses), and through tax incentive grants doled out in return for freezing taxes and capping spending.

Public education in Manitoba is not equitable. There’s an enormous variety of courses and programs available across the province, divisions which have far more choices and far more services for special needs and English as an additional language, divisions that feed kids breakfast and assume the burden that health and social services should be carrying, divisions that keep taxes down by delivering only core subjects.

The assessed value of properties within a school division has a huge effect on the quality of education that a division can deliver. Prime example: the IKEA store and surrounding development will pay Pembina Trails School Division more than $2 million a year when they’re fully operational, without adding a single student to PTSD’s schools.

Hmmmm....under 80-20, what happens to that $2 million?

Back to the main topic.

If you read FRAME (Financial Reporting and Accounting in Manitoba Education), you’ll see disparities — mill rates from 11.1 in Gimli to to 22.6 in The Pas, per student spending from $8,435 in Steinbach to $17,066 in Cranberry Portage, 11.9 students per educator in Thompson to 16.0 in Steinbach.

Those numbers don’t describe equity, but they do to some extent describe local choices, and trustees’ responses to local conditions.

Once you go to a firm 80-20, chances are that you’re locking in any disparities that already exist; you’re reducing if not removing any opportunity for choice locally.

Other provinces basically hand local school boards a budget and tell them to live within that budget — you can read stories on the Toronto Star website every year about cuts that trustees have to make in jobs, services and programs. Even in Ontario, a big chunk of education spending comes from property taxes — it’s just that school trustees have no taxing authority.

But this is an election campaign, not a poli-sci or education administration seminar. We’re going to get simplistic solutions to complex problems.

Read more by Nick Martin.

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