Background On Public Education Funding

first_img Provincial and Territorial Comparison of Funding Sources for Education Public schools education funding Section 530, Municipal Government Act -30- The property tax component of public education funding in NovaScotia has been a topic of considerable interest. Below isbackground information prepared by the Department of Education. Mandatory Education Tax Rate (MET):The bulk of school board funding comes from two sources: theprovincial government and contributions from property taxpayersmandated by the Education Act. The latter amount is determined bythe province, which sets a property tax rate known as theMandatory Education Tax Rate (MET). All property owners in NovaScotia pay the same rate, currently $0.3510 per $100. Themunicipalities collect this property tax on behalf of theprovince and remit the revenue to the school boards. Although this tax is called the minimum municipal contribution,it is not a tax on municipalities. It is a property tax speciallytargeted to education, collected by the municipalities becausethey already collect a property tax. The province could collectthis tax directly, but that would create unnecessary duplication. The valuation of properties for this purpose, known as theuniform assessment, is conducted by Service Nova Scotia andMunicipal Relations. Other Provinces:The mandatory education funding helps provide a consistent levelof educational funding to all Nova Scotia students, no matterwhere they live and go to school. It has been in place for manyyears, and is common across the country. Education funding raisedthrough property taxes in Nova Scotia is lower than mostprovinces in Canada. For example, in Nova Scotia property taxesaccount for about 15 per cent of school funding, compared toBritish Columbia at 28 per cent and Ontario at 41 per cent. (Adetailed comparison was prepared for Finding the Balance, thereport of Saskatchewan’s Commission on Financing K-12 Education,and released on Jan. 8. Table 15 from that report can bedownloaded from the website at .See attachment A, column C.) Attachment B, at the same URL, shows Nova Scotia’s municipalcontribution over the past three years. The figures are slightlylower than those in Finding the Balance because Nova Scotiaincludes more costs in its calculation. The 2004-05 Budget Process:The MET rate was announced on budget day in April as $0.3510 per$100 of uniform assessment. The rate has been the same since2002. All boards were advised of their minimum funding so theycould move ahead with their budgeting process. As with any budget process, the Department of Education based its2004-05 revenue and expense forecast on the best informationavailable. When the budget was drafted, the preliminary uniformassessment was $41,999,264,000. The department then estimated theminimum municipal contribution based on the same MET rate used inthe previous two years. After taking all estimated income intoaccount, it was clear there would have to be reductions in publiceducation services. Text books and property services were amongthe areas where reductions were made. After the budget was prepared, the final uniform assessment camein at $42,764,334,000. The higher uniform assessment meant thatapplying the same MET rate yielded $2.7 million more fromproperty owners than estimated in the budget. Because this moneywas needed — the school boards had already been told to expectservice reductions — the Department of Education recommended tocabinet that the MET rate be left unchanged. Cabinet confirmed the MET rate on June 3. This meant thedepartment was able to restore funding to some of the areas thathad been targeted for reductions. In the previous year, the uniform assessment came in lower thanestimated, and the province covered the resulting $877,400shortfall. Legislation has now been passed to ensure that uniformassessment information from municipalities is filed on time. Supplementary Funding:The Halifax Regional School Board also benefits fromsupplementary education funding. The Halifax RegionalMunicipality (HRM) is allowed to collect this tax under Section530 of the Municipal Government Act. There is no relationshipbetween this funding and the MET. Supplementary funding was enabled at the request of HRM and itspredecessors. The purpose is to allow the municipality tosupplement the minimum funding flowing to the school board.Halifax is the only board with such an arrangement. The legislation allows HRM to unilaterally reduce thesupplementary education tax by up to 10 per cent per year. Thisis intended to ensure any elimination of supplementary educationfunding would be gradual. The reduction can be faster byagreement between the Halifax Regional School Board and themunicipality. Section 530 of the Municipal Government Act isavailable as Attachment C at . Funding Formula:It is important to remember that the funding formula deals withhow funds are allocated to our school boards, not how they areraised. Because demographics and geography impose different costson each board, the formula can be complex. For instance, someboards have to bus relatively higher proportions of theirstudents to school. Typically, the cost of delivering the same services to studentsis higher in rural areas than in the cities. Bill Hogg, former deputy minister of finance, is reviewing thefunding formula in consultation with the school boards and thepublic. The implementation of the new formula should begin in2005-06. Downloads: