The Straight Goods on School Taxes
School tax relief is a long-standing taxpayer concern-especially in rural Saskatchewan. The three main political parties have tried to address in this election campaign. Unfortunately, each of the platforms fall short.
If elected, the NDP will triple the current ten percent property tax rebate for homeowners to 30 percent starting in 2009. The cost over three years will be $317 million. Renters can apply the 30 percent tax credit they can apply to 20 percent of their annual rent costs. Landlords and cottage owners will receive a 10 percent rebate. They will make permanent their 2006 program that caps the agricultural property tax share of education funding at 40 percent.
The Saskatchewan Party would ramp up residential and commercial property owners' rebates to 12, 15, 17, and 20 percent in successive years. Farmers would also see the current rebate on agricultural land increase from 38 to 80 percent by 2012. The total: $280-million over four years.
The Liberals have pledged to completely phase out education taxes on property for homeowners, renters, cottage owners, and the home section of farmers at a cost of $315 million per year or $1.26 billion over four years. They say this move will pre-empt an inevitable tax increase after property values are reassessed in 2009.
In the final tally, the NDP and Sask Party plans take only a half step in the right direction, while the Liberals make a full step in an imperfect direction.
In 2005, the Canadian Taxpayers Federation joined a broad coalition of municipal, school, and business groups asking the provincial government to cover at least 60 percent of the cost of education through general revenues, leaving 40 percent property tax. Despite the 10 percent property tax rebate the NDP initiated, 55 percent of school funding is still paid through property taxes. This is the highest percentage in Canada.
School boards want at least some portion of education funding to come from property taxes so community members have a stake in funding the system. That's why the Liberal plan falls short. Its tax relief, though substantial, is misdirected. Farms, businesses, and owners of secondary properties would pay the entire property tax portion of education, while homeowners would pay none. This not only destroys tax fairness, it also breaks the connection between residents and their local school.
So, how do the programs add up for ratepayers
The Sask Party says that four years from now, the owner of a $200,000 home would save about $1400 in property taxes, $550 more than under the current program. A farmer with two sections of land would save $11,000. That's $4,300 more than at present.
The NDP says under existing mill rates, the owner of a $100,000 home in Saskatoon would get $542.10. (Good luck in finding that property.) The owner of a $80,000 property in Meadow Lake would get $463.20 back. They are quick to add that their existing agricultural property tax rebate translates into $60 million for farmers in 2007.
Anyone can calculate their property tax savings under the Liberal plan at http://www.saskliberal.ca/propertytax. Owners of a $200,000 home in Regina would save $2,258. Someone paying a $500 monthly rent would get $540 back at year's end.
Liberals should be commended for taking the boldest move. While needing to address the equity issue, their policy is the cleanest and doesn't require the complication of issuing rebates for money that shouldn't be taken in the first place. What's important though is that the arrows on school tax are headed in the right direction. The CTF will remain vigilant after the election so that the promises be met and that even broader reform be implemented in the future.
The following is the list of articles, the CTF released in connection with the provincial election held November 7th, 2007:
If elected, the NDP will triple the current ten percent property tax rebate for homeowners to 30 percent starting in 2009. The cost over three years will be $317 million. Renters can apply the 30 percent tax credit they can apply to 20 percent of their annual rent costs. Landlords and cottage owners will receive a 10 percent rebate. They will make permanent their 2006 program that caps the agricultural property tax share of education funding at 40 percent.
The Saskatchewan Party would ramp up residential and commercial property owners' rebates to 12, 15, 17, and 20 percent in successive years. Farmers would also see the current rebate on agricultural land increase from 38 to 80 percent by 2012. The total: $280-million over four years.
The Liberals have pledged to completely phase out education taxes on property for homeowners, renters, cottage owners, and the home section of farmers at a cost of $315 million per year or $1.26 billion over four years. They say this move will pre-empt an inevitable tax increase after property values are reassessed in 2009.
In the final tally, the NDP and Sask Party plans take only a half step in the right direction, while the Liberals make a full step in an imperfect direction.
In 2005, the Canadian Taxpayers Federation joined a broad coalition of municipal, school, and business groups asking the provincial government to cover at least 60 percent of the cost of education through general revenues, leaving 40 percent property tax. Despite the 10 percent property tax rebate the NDP initiated, 55 percent of school funding is still paid through property taxes. This is the highest percentage in Canada.
School boards want at least some portion of education funding to come from property taxes so community members have a stake in funding the system. That's why the Liberal plan falls short. Its tax relief, though substantial, is misdirected. Farms, businesses, and owners of secondary properties would pay the entire property tax portion of education, while homeowners would pay none. This not only destroys tax fairness, it also breaks the connection between residents and their local school.
So, how do the programs add up for ratepayers
The Sask Party says that four years from now, the owner of a $200,000 home would save about $1400 in property taxes, $550 more than under the current program. A farmer with two sections of land would save $11,000. That's $4,300 more than at present.
The NDP says under existing mill rates, the owner of a $100,000 home in Saskatoon would get $542.10. (Good luck in finding that property.) The owner of a $80,000 property in Meadow Lake would get $463.20 back. They are quick to add that their existing agricultural property tax rebate translates into $60 million for farmers in 2007.
Anyone can calculate their property tax savings under the Liberal plan at http://www.saskliberal.ca/propertytax. Owners of a $200,000 home in Regina would save $2,258. Someone paying a $500 monthly rent would get $540 back at year's end.
Liberals should be commended for taking the boldest move. While needing to address the equity issue, their policy is the cleanest and doesn't require the complication of issuing rebates for money that shouldn't be taken in the first place. What's important though is that the arrows on school tax are headed in the right direction. The CTF will remain vigilant after the election so that the promises be met and that even broader reform be implemented in the future.
The following is the list of articles, the CTF released in connection with the provincial election held November 7th, 2007: