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June 2, 2000- Vol. 1 - No.11

Board expresses concern about tax issues

Education Tax cap

In recent letters to the Ministers of Municipal Affairs and Learning, Chairman George Nicholson, on behalf of the trustees of the Edmonton Public School board, expressed concern about the provincial government's intent to cap educational property taxes. The board's position is that the proposed cap unfairly penalizes Edmonton taxpayers - and others province-wide - who are not experiencing rapid economic growth. The following is an outline of the education tax issue.

Background

The City of Edmonton collects the education tax on behalf of the provincial government, but has no control over how the money is spent.

The government distributes the money to Alberta school boards through a per student grant.
The value of your property determines how much education tax you pay. The provincial government introduced the Market Value Assessment (MVA) method of education tax collection last year. Its intent is to keep property taxes in line with current market prices.
Using the MVA model, a community with a prosperous economy and higher property values pays more education tax than one that is slower growing.
When the MVA was introduced, property values in cities such as Calgary and Fort McMurray were escalating. As a result, their residents faced paying significantly more in education taxes.

What does the cap do?

To offset the increase in education taxes paid by the 49 fast growing municipalities, the province has decided to cap the amount they will pay.
The cap means that the $56.6 million shortfall will be made-up by raising taxes in the other 311 municipalities in the province, including Edmonton. The result is that the cap defeats the purpose of the MVA.
In Edmonton, the cap will mean that the owner of a $120,000 home will pay $40 more in education tax. Every Edmonton taxpayer will be affected.
Edmonton property owners will pay $5.5 million more in education tax instead of seeing a $2.5 million reduction - an overall difference of $8 million. The province will distribute the extra $8 million collected from Edmontonians to other municipalities.

The board's message to the provincial government asserts that Edmonton taxpayers should not be paying higher education taxes to subsidize other municipalities who are experiencing strong economic growth.

City's Stormwater Sewer Tax proposal also problematic for the district

City Administration is also proposing a Stormwater Sewer tax which would require each of our schools and buildings to pay $32 per month. This fee would cost the district and additional $100,000 yearly. The following are some of the points raised with the City.

Edmonton Public Schools is committed to spending every available tax dollar in the classroom, where the critical work of teaching and learning takes place.
We have just completed our budgets for the 2000-2001 school year. For our school councils to make changes at this point is disruptive.
We have grave concerns that the tax could open the floodgates to the introduction of user fees to finance other core municipal services. The district, other service providers and non-profit organizations are currently exempt.
The district was not consulted regarding this fee nor were any of the 205 school council members contacted. As a partner in the Joint Use Agreement, the district should have been consultant.
Edmonton taxpayers, and especially parents, are faced with having to pay off the tax at school, at the soccer field, at the swimming pool and at their community leagues.

The board has urged City Council to exempt local school boards from having to pay the Stormwater Sewer tax.

For more information about these tax issues, contact Dean Power at 429-8141.

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