There was just one problem when Saskatchewan premier Lorne Calvert told rural municipalities early last month that the reliance on property tax to fund education must change.
He built expectations that he didn’t immediately fulfill.
“He said the status quo is not on,” said Saskatchewan Association of Rural Municipalities president Neal Hardy. “But then I read the throne speech.”
The throne speech did not mention property tax. Then came the March 28 budget, and Hardy wasn’t much happier.
The province announced a one-person commission would study the issue and make recommendations by the end of the year, allowing changes to be incorporated into the 2004 budget.
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“Where was the reduction in education tax on properties?” asked Hardy.
Saskatchewan has yet to make any concrete changes to its system of education funding but it, along with the other prairie provinces, is taking a look at the issue.
Last year, a government committee gathered some information, but could not make any recommendations.
Deputy minister of learning Craig Dotson said the committee could only conclude the issues are complex and there is no consensus.
That is true among farm organizations as well. They have ideas about what governments can do to alleviate the tax burden of rural landowners, but not everyone agrees on what actions should be taken.
In Alberta, Jack Hayden, president of the Alberta Association of Municipal Districts and Counties, said education funding should not be linked to property ownership.
“We think (government) should take it right off property,” said Hayden.
“We’d like to see it taken off residences, too, and just leave it on industrial and commercial property.”
That move would provide $700 million in tax relief, Hayden said. About $40 million of that would be realized by agricultural landowners.
The Alberta government has already removed education from the levy on oil industry machinery and equipment.
“There was almost a $380 million tax forgiveness to the oil industry and all we’re asking for is $40 million for agriculture.”
In Manitoba, where there are both provincial and local education levies, Stuart Briese wants to see farmers’ share decreased.
“Right now in Manitoba it runs roughly 50-50 (between provincial funding and property taxes)…,” said Briese, president of the Association of Manitoba Municipalities.
“We’ve taken the position that should move to 80-20.”
Briese, who farms near Neepawa, Man., said that would likely mean tradeoffs, because it would shift $400 million in taxes to the province.
“That money isn’t there,” he said.
Manitoba also has a committee examining ways to change the system. Briese expects an interim report soon.
His neighbour, Weldon Newton, who heads Keystone Agricultural Producers, said his organization wants the government to take more money out of general revenue to fund education. KAP recommends farmers pay tax on their houses, but not on land and farm buildings.
“We feel very strongly that agriculture pays a disproportionate share,” said Newton.
Another option is to increase the provincial sales tax, although Newton admits that isn’t a popular idea.
Phil Lewis, a director with Agricultural Producers Association of Saskatchewan, said he would also be willing to be taxed only on his house.
“I’d drop from $4,500 to $1,000 or $1,500,” he said.
But that would result in a shortfall, because there aren’t enough farm homes to pick up the $170 million now raised from agricultural land.
A coalition of diverse organizations, including SARM, the Saskatchewan Stock Growers Association, Saskatchewan Wheat Pool, National Farmers Union, Western Canadian Wheat Growers Association and the Saskatchewan Livestock Association has said farmers will pay their share.
The coalition proposed in 1999 that the Saskatchewan government cap the amount being collected and reduce it by 15 percent per year for the next 10 years.
If that were to happen, agricultural property owners would be contributing about $30 million to education costs by 2010.
The government did not take them up on the suggestion.