Investing in education pays future dividends

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This article was published 04/03/2023 (960 days ago), so information in it may no longer be current.

The Manitoba government is playing a shell game: using federal and inflationary windfall revenue to give out tax cuts while neglecting public spending needs.

Manitobans want the province to stop the tax cuts and adequately fund public services such as education. Evidence shows this investment, in our province with sky-high child poverty rates, will pay dividends well into the future.

Manitoba’s fiscal windfall results from high inflation rates boosting tax revenues and transfer payments. At the same time, government wage freezes and service cuts have reduced expenditures, damaging health, education and other public services.

Public-sector wages and working conditions are increasingly uncompetitive with the private sector, generating huge recruitment problems. Manitoba is poised for a budget surplus soon, owing to this austerity.

Equalization payments and the health and social transfer to Manitoba are increasing by $733 million this year. The very real possibility of a Conservative government soon in Ottawa would quickly end high federal equalization payments to Manitoba. Manitoba will receive $1.978 billion over the next 10 years, 35 per cent of which is “untied,” so the province could spend it how it wishes — including giving more tax cuts.

Relying on the federal government and inflation to boost Manitoba’s revenues while cutting taxes is unsustainable and irresponsible.

Manitoba is underfunding health and education while giving regressive tax cuts to corporations and property owners: the wealthier property owners are, the more money they get back.

In Budget 2023, Manitoba is slated to increase the education property tax rebate cheques to 50 per cent of property taxes for $453 million. To date, the rebate cheques have cost $578 million. These rebates are financed by borrowed money; worse, the province has no plan on how to pay for a sustainable education system.

These tax cuts will lead to structural deficits or a permanent underfunding of core public services, compromising our ability to grow our economy.

Public education in Manitoba is funded by general revenue and education property taxes. The government has told school divisions they cannot increase the special levy, or division budgets will be clawed back. With property taxes capped by Bill 71, education funding is being cut.

The provincial contribution to public education funding has decreased from 62.5 per cent of public school expenses to 58.4 per cent from 2016/17 to 2020/21 (latest year data available). During those four years, $107 million was cut from education, due to the province decreasing its share of funding.

To make matters worse, provincial funding to public education has not kept up with inflation for over six years and is not funding adequately for growth in the student population owing to natural population growth and immigration because of the war in Ukraine, for example.

The government’s own K-12 Education Review supported more research on addressing poverty to improve educational outcomes. Extensive research shows socioeconomic status is the single most powerful predictor of educational outcomes: high school graduation rates in the lowest income quintile are roughly half those in the highest.

The Final Report of the Poverty and Education Task Force released last Friday includes a comprehensive list of recommendations: school nutrition programs, better mental health services, transportation to school and more. Money spent on these items now will help children do better in school, graduate, find decent work and boost provincial productivity.

School divisions undergoing budget consultations are transparent about the hard choices brought on by the underfunding of public education: insufficient funding means bigger class sizes and less one-on-one help for children who need extra attention.

Contrary to task force recommendations, divisions are looking at cutting transportation for students. Students in rural areas are facing increased time on buses — up to an hour each way. Budget cuts mean schools rely more often on fundraising from parents, which discriminates against schools in lower socioeconomic areas and perpetuates the cycle of poverty.

Manitoba’s adult education programs are underfunded, with huge waitlists. This prevents adult learners, many parents with children in poverty, from improving their economic status.

All this is shameful. Most Manitobans don’t want the property tax rebate cheques if it means cutting public services such as education funding. A representative sample of Manitobans in a poll done by Probe Research found that most (58 per cent) want the provincial government to keep the money earmarked for the rebate and spend it on needed public services.

Budget 2023 is not too late to respond to the government’s reports by boosting education funding to deal with poverty. Manitoba should not rely on bonanza revenue to cut taxes and instead wisely invest this in public services that pay dividends to us all.

Molly McCracken is the Manitoba director of the Canadian Centre for Policy Alternatives, an independent, not-for-profit research institute.

Final Report of the Poverty and Education Task Force