The decades-long fight to ease the burden of education tax on Saskatchewan agricultural land is over.
The government last week introduced province-wide mill rates for residential, agricultural and commercial property and assumed greater responsibility for paying the Kindergarten to Grade 12 bill.
The provincial share last year was 51 percent. It will pay 63 percent this year and 66 percent next year.
“We think that is an appropriate ratio to move toward,” said finance minister Rod Gantefoer.
Property owners will pay $103 million less this year and save another $53 million next year as the changes take effect. The government is spending an extra $241 million this year to pay for teacher salary increases and inflation.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
Farm and municipal leaders had only praise for the March 18 budget that set the changes in motion.
“It’s a great budget for all of Saskatchewan,” said Saskatchewan Association of Rural Municipalities president David Marit.
Over the years producers tried many ways to get governments to hear their concerns. They worked in coalitions, passed resolutions, staged rallies at the legislature and organized tax revolts.
During the 2007 election campaign, the Saskatchewan Party promised to reduce the education tax. The government last week implemented a hybrid of recommendations from a report authored by Rosetown MLA and former rural municipal administrator Jim Reiter.
The province joins most others in moving to either uniform mill rates or a fully funded K-12 system.
The education tax rate for agricultural land will be 7.08 mills this year and 3.91 mills in 2010.
Residential rates will be 10.08 and then 9.51, while commercial rates have been set according to taxable assessments.
Businesses assessed at less than $500,000 will pay a rate of 12.25 mills, while those between $500,000 and a dollar short of $6 million will be taxed at 15.75 mills. Commercial properties assessed at more than $6 million will be taxed at 18.55 mills.
Municipalities will retain the authority to collect education tax.
Marit said the impact on farmers and ranchers will be huge.
“For me on my 20 quarters of farmland I’m going to see probably a reduction in the neighbourhood, by the time this is done, of close to $10,000,” he said.
Mark Elford, first vice-president of the Saskatchewan Stock Growers Association, said the new system will be fairer. He said agricultural landowners carried too much of the load for too long.
He put the tax change in context by comparing it to the recent provincial livestock support program.
“We just finished getting a $40 per cow payment,” he said. “We’re looking at probably almost over half that on a yearly basis, per cow.”
Agricultural Producers Association of Saskatchewan president Greg Marshall said the reduction was a long time coming.
“Finally it’s here and that’ll put money back into producers’ pockets and lower the cost of production for sure,” he said.
Allan Patkau, finance chair of the Saskatchewan Cattlemen’s Association, said he likes the idea of a fixed mill rate.
“I guess property won’t become the scapegoat for the overruns of spending,” he said. “There’s going to have to be an accountability there.”
The Saskatchewan School Boards Association is also interested in accountability now that boards have lost access to the property tax base.
President Roy Challis said the government has promised to involve boards in determining funding for divisions. The association will hold the government to its word, he said.
“There are many boards who are probably comfortable with the change,” he said. “There are some that are uncomfortable. So we’ll have to work all of that out.”
