(Updated) It’s Time to End the Education Property Tax Designation illusion

Updated Feb 28th: Motion passed by the Board of trustees and letter is being drafted.

Updated Feb 23rd 2017: Updated remarks posted at the bottom of this post:

Feb 21st, 2017: Many Albertans are still under the illusion that where they designate their Education Property taxes (public, separate, undeclared) makes a financial impact on the money to hire teachers, buy computers or build new schools. It does not, and this deception is problematic for many reasons. As such I have asked that the following motion be debated at the February 28th Edmonton Public School Board Meeting:

MOTION: The Edmonton Public School Board should advocate to the provincial government to eliminate the designation of Education property taxes and continue to advocate to our sole funder for predictable sustainable funding and new schools in alignment with our capital plan.

Whether you dedicate your education property taxes to the Public, Catholic/Separate school board, it does not actually make a pennies difference to education funding. This misleading box is an anachronism that should have been deleted when the taxation powers of school boards were removed in 1994. Education Property taxes from across Alberta are collected by municipalities and then pooled into the general revenue of the provincial government. They are then allocated via per student funding to each individual school board. More students? Funding goes up. More people designate their funding to your school board but your enrollment stays the same? No new money.

So the next time you here someone say “But I send my taxes to the X system!”, you can clarify that it only matters where they send their children, not their tax dollars. And the next you hear someone not understanding how we need more money for new school construction or to hire more teachers even though your property tax went up, make sure to clarify that these are unrelated issues.

As a thought experiment, the provincial government could cut the education property tax amount to zero, and while that would reduce the revenue the provincial government took in, assuming constant enrolment, the funding that flows to any school board would remain the same because of the per pupil funding formula.

And just as a disclaimer, I’m not advocating at this time to get rid of Education Property Tax (although I agree with Mayor Don Iveson that Property Taxes are regressive) and just incase any readers view this as a backdoor attempt to defund the Catholic or Francophone School System: it absolutely is not and I argue no school trustee or board is well-served by this illusion.

Here are a few other reasons to get rid of the fictional check box:

Does the designation matter?

It’s creating unnecessary paperwork: I believe it was an oversight that was missed in this process. As the province is reviewing amendments to the Modernized Municipal Government Act, it is time that we made education property tax transparent and more efficient– this is unnecessary paperwork. This would be a very simple and straightforward amendment that would reduce paperwork for municipalities and Alberta Education.

It confuses the public as to why their badly-needed school isn’t built yet: I’ve often heard expressions of frustration that given the fact hundreds of new residents indicated that they wanted to send their taxes to the public school system, so why didn’t we take that money and build a new school? Can’t we count the houses that mark an X? Because the Education Property tax does not impact school funding and new schools are awarded by the Government of Alberta (more on this later) it puts school boards — both Public and Catholic — under scrutiny and deflects blame from previous governments that took away our ability to generate our own revenue for operations or capital projects and have not fulfilled our evidence-based school needs list that is our capital plan!

It gives the provincial funder a political shield against adequately funding Education: Since 1994 when the provincial government removed the taxation powers of school boards, the provincial government is our sole funder. We are funded on a per-pupil enrolment basis and the responsibility for resourcing our schools falls solely to the provincial government. They even set the education property tax amount that is requisitioned from municipalites. We must hold them accountable and it could be argued that the existence of the “designation” allows, intentionally or not, a hanging question of “Well maybe funding to a board decreased because ratepayers dedicated their funding elsewhere.”

It does not assist student enrolment planning: As I mentioned in a previous post students move freely between Catholic and Public systems as well as within schools. You do not need to show your property tax forms as a parent at pre-enrolment and it will not guarantee you a space in the line for a crowded school or a lottery. Remember, thousands of renters do not assign their taxes so we don’t know their intention either. Capital plans are not based upon the number of people who check the box one way or another and remember renters don’t check the box at all! This further confuses our capital planning process on where Catholic or Public school boards need new schools and misleads the public.

It confuses school trustee eligibility for those seeking office and voting: This box further contributes to the confusion as it has no bearing on your eligibility. When you turn in your nomination package as a candidate you do not have to show how you designate your property tax nor when you pick up a ballot to vote for school trustee, there is no tax confirmation required to vote for either board (how else would renters run or vote?). I was just reading about a fascinating case next door in Wetaskiwin where a former Catholic trustee ran and was elected to the Public School board:

“He thought directing his taxes to the public school division made him eligible to run, she said. Although she said the law is outdated and should be changed, the board is still bound by the School Act and should comply.

There is a sense of urgency to supporting my motion and the Minister making an amendment:

First, because amendments are underway to the Modernized Municipal Government Act: It would be a very convenient time to correct this error and be transparent in our taxation. In the past Public and Catholic have held onto this checkbox in a wish that somehow taxation powers will be restored. I don’t know that this is still a top advocacy priority for school boards. The bigger issue at hand for me is transparent communication of funding needs with the taxpayers and our parents.

Secondly, it is a municipal election year and already questions of eligibility are starting to arise. Recently, I was contacted by a hopeful public school trustee candidate whose children are enrolled in Catholic school but she wanted to run for the public board but didn’t know if she was eligible. This box contributes to the erroneous belief around candidate eligibility. As a voter you don’t have to bring your property check box to the ballot station in order to cast your ballot for school trustee.

Thirdly, by all accounts and signals by the provincial government, this is going to be a very difficult budget year. As a growing school board we depend on the provincial government to fund enrollment growth for school boards. Our school board has already grown 6000 students in the last two years. We need to do what we can to speak truth to our parents about how their schools are funded, how their schools are built, and the power that they have to activate their MLAs to make the right decisions at the budget table.

I realize that tax policy may be dry or not as interesting as other education issues, but this issue is critical to the sustainability and stability of our schools.

Background:

Here is the AUMA:

Municipalities are the authorities responsible to collect property taxes. The municipal tax portion is managed by the municipality to fund local operations and the education tax portion is transferred to the province to fund the Alberta School Foundation Fund.

and:

“Since all school boards across the province are funded on an equitable per-student funding formula, the declaration does not actually affect the level of funding of any public or separate school board.”

(https://auma.ca/advocacy-services/programs-initiatives/property-assessment-and-taxation-hub/fundamentals-alberta’s-property-assessment-and-taxation-system/fundamentals-property-taxation-system)

City of Edmonton:

Use of the Education Tax:

The Government of Alberta states that education property taxes support public and separate school students in kindergarten to grade 12. Education property taxes are pooled and then distributed to all Alberta school boards on an equal per-student basis. The majority of these funds are for instruction, including teacher salaries, textbooks, and other classroom resources.

https://www.edmonton.ca/residential_neighbourhoods/property_tax_assessment/education-tax.aspx

UPDATED COMMENTS:

While the school board will have a chance to debate the motion on Tuesday, February 28th, I thought I would post a few updates:

But while many are under the impression their dollars go directly to the school district they check off, the funds are actually pooled provincially and distributed to schools based on enrollment.

“We were constantly told that Catholics paid for Catholic education. And that didn’t seem to add up,” said APUPIL spokesperson Luke Fevin.

The numbers show roughly $1.9 billion of property taxes collected in 2014-15 were from taxpayers who chose to support public, versus $214 million from those supporting Catholic.

  • The Minister of Education responded to questions on the subject:

Education Minister David Eggen said the Constitution and Alberta Act compel the government to ask about the religion of property owners where a separate school board exists. (http://edmontonjournal.com/news/local-news/school-board-funding-choice-box-should-be-dropped-from-property-tax-forms-says-edmonton-public-board-chairman)

  • While currently required, the constitutional and Alberta Act changes could be easily made in the next sitting of the legislature and then would be ratified by the House of Commons/Senate. The amending formula for the constitution could be as easy as changing Daylight Savings Time:

    The Constitution’s central document — more specifically section 93 the Constitution Act of 1867, also called the British North America Act — gives provinces the right to make laws governing education. Such documents, including the Alberta Act and the Saskatchewan Act, can be changed. The procedure for this type of amendment is laid out in section 43 of the 1982 Constitution Act. It requires the approval of the House of Commons, the Senate, and, crucially, only the province or provinces that the change affects.

    In Ontario the procedure would be basically the same. The provincial and federal legislatures would have to agree to the change, and a line would be added to section 93 stating that the separate-school rules don’t apply to Ontario. There’s no reason to think the feds wouldn’t go along with this. They green-lit Quebec’s move to do the exact same thing in 1999.  

    http://www.metronews.ca/views/opinion/2016/03/14/canadas-publicly-funded-religious-schools-have-to-go.html