School Division Amalgamation

Res #: 19-04M
Number: 19
Year: 2004
Midterm: Yes
Expired: Yes
Responses Received: No
Departments: Saskatchewan Learning

Resolution No. 19-04M

WHEREAS, the Minister of Learning has announced that he intends to force amalgamation of public school divisions in the province; and

WHEREAS, the proposed map of the new large school divisions will transfer rural assessment dollars into large urban communities to reduce the reliance of the Urban School Divisions on funding from the Foundation Operating Grant, whereby providing more government funding to the major cities in the province; and

WHEREAS, the amalgamation of school divisions will not address the concerns expressed by SARM delegates to provide tax relief of rural properties;

THEREFORE BE IT RESOLVED, that SARM immediately communicate to the provincial government, our opposition to this forced amalgamation, and urge the Minister of Learning to abandon his forced amalgamation plan; and

BE IT FURTHER RESOLVED, that the government address the issue of tax relief through additional Provincial funding as recommended by the Boughen Report.

Response from the Honourable Andrew Thomson, Minister of Learning:

The intent of this latest initiative to renew and restructure school divisions is to address the significant inequity among school divisions, which at the extreme has a ratio of 25 to 1 between our highest assessed and lowest assessed school boards.

As present, we have some school divisions with a great deal of wealth that can spend close to $14,000 per student on a range of programs and services while maintaining a very low mill rate; the provincial average is $8,000 per student. We also have school divisions that have significantly fewer resources and spend approximately $6,500 per student, which impacts on the ability to provide a wide range of programs and services to students while maintaining mill rates that are acceptable to education ratepayers. This is not an educations system that is sustainable. In very real terms, if we are not prepared to alter the size of divisions to provide fairer distribution of local wealth, and not change the funding formulas, we could invest 20 per cent more into the education system, or $100 million, and still have several school boards that receive no provincial support.

This speaks to the need for us to undertake real and meaningful changes to ensure greater fairness and equity is brought to the system before we add new money. Restructuring is not directed at lowering mill rates in the new school divisions. Depending on the mill rate of school divisions, the expectation is that the new school divisions will experience an adjustment towards the provincial weighted average of 19.26 mills in 2004. For the new school division that includes South Central, it is anticipated the mill rate (based of present assessment) will fall within the range of 15.45 and 19.26 mills, depending on the decisions of the school board, which has the autonomy to set the mill rate for the school division.

Any savings that may occur by reducing school division governance and administration in the new school divisions will be channeled into programs and services for students in your communities. Government understands that property owners are concerned about the level of education property tax and continues to work towards adjusting the balance of education financing borne by the property tax base. We remain determined that a change in the portion of education funding from property tax cannot happen in one year, but would take many years to be phased in. As you are aware, a Working Committee on Education Property Tax Relief was formed between the Minister of Learning, the Minister of Government Relations and the primary groups that have the power to levy property tax, including school divisions.

The committee has been tasked with the objective to develop and present to government a long-term proposal that identifies an administratively efficient, scaleable and sustainable solution to property tax relief. The intent is to establish a definite benefit to the property taxpayer, while recognizing the competing demands for limited provincial funding. The working committee has presented a set of options that address long-term education property tax relief to government for their consideration.

The Ministers advised they would take the committee's advice forward as their Cabinet considers a solution. In the short-term, the Departments of Learning and Government Relations have recommended that the one-time equalization funding could be used through the establishment of a new two-year education property tax relief package of $55 million per year for two years. This education property tax relief package can be provided over the 2005 and 2006 property tax years.

Property tax relief of $55 million in each 2005 and 2006 is to allow the government to consult fully with local government authorities to develop options for sustainable long-term property tax relief considering 2005 reassessment and restructuring of Saskatchewan school divisions. The two year funding will provide bridging until the federal government's independent panel finishes its review of equalization. We are working with stakeholders to determine a long-term solution to education property tax relief.

Long-term relief must be based on the information coming out of revaluation, restructured school divisions and the new school operating grants systems to be most effective. I want to assure you that whatever is decided upon with respect to education property tax relief, tax relief, the objective and impact will be in the best interests of the students and taxpayers in our province.