Bill 71 created education funding mess

Opinion

Hey there, time traveller!
This article was published 17/10/2021 (1164 days ago), so information in it may no longer be current.

THANKS to the hard work of Manitoba teachers, school trustees, many education leaders and the dedicated work of the NDP opposition, the hated Bill 64 (the Education Modernization Act) is dead, along with four other unpopular bills. However, what about Bill 71, which is now law and very much alive?

That bill, also known as the Education Property Tax Reduction Act, was meant as the financial companion to Bill 64, and was passed on the assumption that Bill 64 would become law. The province would get control of all education matters; school boards would be dust, local taxes would disappear, teachers would bargain centrally and 100 per cent of education funding would eventually come from the province.

But that’s not what happened. Now we are faced with a mandate in Bill 71 for a large and growing rebate of local school taxes, currently financed by borrowing the money. It’s a gift that grows with the value of your house: big rebates for big homes, small ones for low-cost homes, and nothing for renters.

The local education property tax remains intact, and no alternatives are in sight. School boards continue to set a special levy within provincial limits, and in 2022 the province must send property owners a rebate of 50 per cent of the special levy on their tax bill.

Nor is a provincial balanced budget in sight. Bill 71 will require that the province borrow $240 million in 2021, and a further $480M in 2022, with no education finance plan to replace the current complex system. This is $720 million more debt because of a premier’s stubbornness, a gift to higher-value property owners and nothing for renters.

What’s the way forward? The answer is both short term and long term.

First, Bill 71 must join the scrap heap left when the former premier resigned and the interim premier wisely drove a stake through the hearts of the five bills left on the order paper, including Bill 64. Because Bill 71 was passed and proclaimed, the legislative assembly must repeal Bill 71. This could be done simply by unanimous consent of the legislature.

The current property-tax rebate system would then stay in place, as will the special education levy. Homeowners will have had a nice one-time gift, but will then revert to the previous system in which owners of high-priced homes pay more, and low-priced ones less — a broadly progressive outcome.

As a community, we can now take some time to sort out what we expect of our education system and how we want to finance it. At its best, this would be a public, open process, representing all stakeholders, and not a government-controlled PR exercise.

Three values should drive this quest. The first is equity. Equity is not equality; equity is making sure kids of every region and of each level of individual capacity have access to high-quality education opportunities. Equity takes into account family circumstances — poverty, poor housing, frequent moves and other socio-economic factors profoundly affect education outcomes, but cannot be changed by the education system itself. Funding needs to reflect these realities.

The second is fairness, to those of us who pay the costs of education. Taxation fairness means taxes based on ability to pay, related to either income, or wealth, or a combination of both. Today, we fund 60 per cent of our education budget through the big basket of provincial general revenues. Our income-tax system is only roughly progressive; that is, low-income people pay proportionally less than high income people.

The other 40 per cent is essentially a wealth tax, based on the value of property as reflected in the property-assessment process. It is made more equitable by a system of property-tax rebates, which reduce the cost of education property taxes for lower-value properties, while having little impact on high-value homeowners.

The third value is quality of education. This will always be a matter of debate. Some see education as broadly about preparing citizens of a democracy with literacy and numeracy, but also with critical thinking skills, creativity, capacity to collaborate and adaptability, adjusting to a rapidly changing world and workplaces.

Others see education more narrowly, primarily about reading, writing and arithmetic, readying kids for the job market of today. This view leads to standardized testing and rote learning, pitting poor regions against wealthy ones. The losers are those who cannot compete, not because their kids are less able, but because their socio-economic realities often overwhelm the best efforts of educators.

But first, we need to get rid of Bill 71, take a deep breath and engage Manitobans in how to strengthen and then fund our public education system.

Tim Sale is a former assistant deputy minister of Manitoba education and a former NDP cabinet minister. He is also a contributing writer to the Canadian Centre for Policy Alternatives – Manitoba.