The first stage of a Manitoba government plan to give home-owning seniors a break on paying education taxes has reignited calls for changes to how the province funds schools.
The Selinger government, living up to a 2011 election promise, will begin to eliminate the education part of the municipal tax bill for seniors who are 65 and older, starting this year. It will be fully eliminated by 2015. There are more than 180,000 seniors in the province, but it's not known how many live in their own homes.
'Is this something that the school divisions are going to have to make up because they will be losing that revenue from seniors?'
Manitoba Education Finance Coalition spokesman Lorne Weiss, president of the Manitoba Real Estate Association, said while worthy, the tax rebate is forecast to take $50 million out of the provincial treasury when it's completely applied next year. Coalition members include real estate boards in the province, Keystone Agricultural Producers and the Manitoba Association of Cottage Owners.
"We're looking at a pretty significant impact on revenue," Weiss said Friday of the tax break for seniors. "Is this something that the school divisions are going to have to make up because they will be losing that revenue from seniors?
"Will they have to go to the rest of their tax base and increase it to cover it off or is it coming from another fund the government is using? Where is it coming from?"
Weiss said the tax break is coming as the City of Winnipeg plans a general property tax increase of 2.95 per cent and with school division taxes still to be determined. School property taxes jumped an average 4.1 per cent in 2013, driven by more people on the school payroll.
How the NDP will make up that revenue shortfall from the seniors tax break has been one of the bigger questions since budget day last spring as the government wrestles with a $485-million deficit for 2013-14 plus its promise to post balanced budgets by the 2016-17 fiscal year.
The province also says it stands to lose $500 million in federal transfer payments over the next few years because of a dispute with Ottawa over Manitoba's population. The Manitoba government believes Statistics Canada underestimated the province's population by 18,000 people in the 2011 census, resulting in fewer transfer dollars.
Weiss said all this comes as education costs -- including teacher salaries -- continue to climb. Breakfast, lunch and student special-needs programs are also being borne by schools.
"Even though we're not seeing a huge increase in enrolment, we're seeing a definite increase in cost per student," he said.
The Frontier Centre for Public Policy has said from 1999 to 2010, public school enrolment in Manitoba fell by almost 10 per cent to 177,679 students from 197,067, but the number of educators increased by 10 per cent to 14,433 from 13,114. It also has said the cost of schools increased by 60 per cent to $2.26 billion from $1.41 billion while the consumer price index (CPI) increased by 25 per cent. The increase in cost per student increased by almost 78 per cent to $12,704 from $7,155, three times the increase in CPI.
Weiss said to meet these rising costs, and be more fair to property owners, the province has to fund education as it does other core government services such as health care, family services and justice. That means it should be based on the ability to pay, such as through income tax -- not the address where people live.
He said there should also be a single mill rate for the city's nine school divisions and ultimately a single mill rate for the entire province. The number of school divisions should also be reduced.