School tax problem not unique to Saskatchewan
Author:
David Maclean
2005/10/25
Five hundred Pennsylvanians recently crowded the rotunda of their State Legislature in Harrisburg - some adorned with tea bags hanging from their hats - to call for school tax reform. Their aim was to draw attention to something called the Commonwealth Caucus Tax Plan to eliminate school taxes on property by 2009.
To the demonstrators, this was their own version of the Boston Tea Party.
Under the plan, school taxes on property would be replaced by increases in municipal sales taxes. And, according to the Pittsburgh Post-Gazette, that's not the only plan for reducing or eliminating school taxes in that state.
The Local Tax Policy Caucus has proposed shifting $850 million in special education costs from local school districts to the state. The plan would provide for property taxes to be reduced by half and for all other school taxes to be eliminated.
Pennsylvania Governor Ed Rendell, meanwhile, is attempting to modify his plan to force school districts to accept $1 billion in slots revenue to lower property tax bills by an average of $300 a year statewide. Only about 20 percent of the state's 501 school districts have agreed to participate in the program.
Meanwhile a proposal from a Democratic state representative would provide tax rebates based on the amount of property taxes paid. What a concept - exempting property taxes from provincial income tax.
Of course all these proposals are not without their detractors. Some say replacing property taxes with a widened sales tax would have a negative impact on the poor. However, proponents counter by pointing out that 70 per cent of residents with incomes below $32,000 own their homes. Eliminating property taxes, they say, would put more money in the pockets of the working poor.
The point of mentioning all of this is not to debate the merits of the proposals, but to point out the very existence of such proposals. In Pennsylvania there are bi-partisan committees on school taxes with their own recommendations. The governor of the state (a former mayor) has his own proposal to fund schools. All of these elected representatives will bring the various proposals to the legislature, debate them, and hopefully build a consensus.
It's dramatically different here in Saskatchewan. There have been plenty of protests and there is a general agreement that school taxes on property must be addressed, but there has been little to no action - let alone new thinking.
The Canadian Taxpayers Federation delivered thousands of signatures to the legislature calling for a commission on funding K-12 education. We succeeded in getting the commission, but its recommendations were mostly ignored. Earlier this year the government announced a two year program to rebate school taxes by eight per cent, but those modest savings were gobbled up by mill rate or assessment-related tax increases.
Our legislature is virtually grid-locked with half the house calling for tax reduction and the other half sitting on their hands, and forever it shall remain so.
There is a fundamental problem with our political system when there is universal agreement that something needs to be fixed but nobody does anything about it. It's important to know that it doesn't have to be this way. On property tax reform we can learn a lot from our friends in Pennsylvania.