Ron Borys had simply had enough.
It was 1999. The farm crisis was at its peak. Farm safety nets weren’t helping those who needed help the most, and farmers were protesting in city streets and on provincial highways.
Emotion was running high, and escalating education tax on farmland was an easy target for angry farmers.
For nearly 40 years, prairie farmers like Borys have been calling for a system of taxation that reduces the amount that rural landowners pay toward schooling.
In 1964, delegates at the Saskatchewan Association of Rural Municipalities convention passed a resolution suggesting that the “costs of education be borne by society as a whole and that revenue for education be derived from an equitable tax imposed by the federal and provincial government on the ability to pay principle.”
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Variations of that resolution have come up every year since.
Borys, who farms southeast of Regina near Colfax, Sask., started farming around the time the original SARM resolution was passed.
Thirty-five years later, he was organizing a tax revolt in his municipality , encouraging landowners to withhold their education tax.
“It was starting to hit us pretty danged heavy,” Borys said recently. “To me, it seems a little ridiculous that the property tax I paid for roads and snow removal – actual services – is less costly than the education tax. It’s just out of whack.”
When he started farming, Borys was paying $4,050 in school tax on his 1,800-acre farm. Today, he’s paying $6,000 on a little more than 2,000 acres.
“I pay more education tax on my ag property than most doctors and lawyers in town do,” he said.
The situation varies across Western Canada. Each province has its own method of collecting school tax from rural landowners.
In Alberta, for example, total spending for kindergarten to Grade 12 education was $3.6 billion in 2002-03. Of that amount, about 64 percent or $2.35 billion came from general revenues and about $1.25 billion was collected through a uniform provincial education property tax rate that is applied to all property.
Alberta Learning spokesperson Mark Cooper said the province used to allow school boards to set and collect education levies locally.
But some boards had larger land bases and higher assessments, meaning they were able to collect a comparatively large portion of funding through property taxes.
Under Alberta’s current system, the province sets a flat education mill rate which is applied to all properties. The money collected is then combined with money from the general revenue fund and education funding is distributed to school boards on a per student basis.
In Manitoba, the situation is similar to Saskatchewan’s.
Weldon Newton, president of Keystone Agricultural Producers, estimates that farm families pay anywhere from four to 10 times as much school tax as families in neighbouring communities.
Not long ago, Newton compared his education taxes to someone living in nearby Neepawa, Man. He chose a street where the houses are comparable to his own and found homeowners there were paying between $600 and $700 each to the Beautiful Plains School Division.
“My farm pays over $6,000 to the same school division,” Newton said.
On the surface, it seems that prairie farmers have a legitimate beef about the way education is funded.
Many observers say rural landowners shouldn’t be complaining. They say farmers shouldn’t compare their land taxes to urban residences because farming is a business.
Saskatchewan farmers already get a break because cultivated land is taxed at only 55 percent of its assessed fair value and range land is taxed at 50 percent.
By comparison, residences are taxed at 70 percent, elevators, pipelines and railways at 75 percent, and commercial and industrial property at 100 percent.
In some rural areas, where there is plenty of highly assessed commercial property such as oil wells or potash mines, businesses are picking up a bigger share of the total property tax bill.
In those cases, school divisions can keep their mill rates down, and all taxpayers reap the rewards.
As well, farmers and businesses can deduct their property tax payments when calculating their income tax payments.
So why are farmers complaining?
Craig Melvin, executive director of the Saskatchewan School Trustees Association, agrees that rural landowners get some breaks, such as income tax deductions.
“It is a write-off,” he said, “but you have to ask yourself against what. It would be nice (for farmers) to have income to write it off against.”
According to Melvin, the real problem is that funding sources have shifted.
At one time, the Manitoba government covered 60 percent of kindergarten to Grade 12 operating costs while property tax paid for the remainder.
Today, property tax pays for about 46 percent of school costs, through local and provincial levies, but taxpayers also receive a 12 percent tax credit.
Another factor that concerns some farmers is the way land is assessed. Until 1997, Saskatchewan farmland was assessed on its productivity.
Then, the province moved to a fair market value assessment and there was a shift in the amount education received from property tax on agricultural land.
The province offered some relief in 2000 when it introduced a two-year, $50 million farmland education tax rebate program. But reassessment in 2001 pushed agricultural values up again, and effectively wiped out the rebate benefit for many farmers.
Another reassessment, which is scheduled to take place in 2005, is expected to shift costs again as it moves back to a productivity model.
Last fall, the Saskatchewan Association of Rural Municipalities commissioned a study to compare education tax costs in 15 rural municipalities from 1982 to 2002.
“We found that in some cases the education tax in nominal dollars was up to double and more,” said president Neal Hardy.
“It was in some places even triple.”
The study showed a less dramatic increase when inflation and rebates were taken into consideration.
Nonetheless, rural property owners continue to lobby for a new, more equitable system of funding education.
According to Hardy, education tax remains an irritant because it is an input cost farmers are obliged to pay, regardless of how much they receive for farm commodities such as wheat, beef and canola.
Other businesses can hike their prices to cover increasing input costs. For farmers, that is rarely an option.
Hardy said many farmers don’t want the education tax removed completely. Most rural landowners recognize that it costs more to educate rural students.
Transportation costs are higher, as is the cost of paying teachers because the student-teacher ratio is normally lower in rural areas.
“We have to pay some,” Hardy said.
But if the average cost per quarter is $500 in Saskatchewan, $300 in Manitoba and only $125 in Alberta, he said, how can Saskatchewan farmers remain competitive?
