CTF Study Reveals True Cost of Education on Manitoba Farmers

Study

BRANDON: The Canadian Taxpayers Federation (CTF) today released a study on Manitoba's high property tax burden. The study is the first of its kind to outline the impact of school division and municipal taxes on Manitoba farmland.

"The school tax burden compounds the latest problems of flooding, low commodity prices, and unfair international farm subsidies," noted Victor Vrsnik, CTF-Manitoba provincial director.

The CTF conducted research on over 200 Manitoba municipalities to examine the extent of property taxes levied on farmlands. The findings are outlined in the study entitled, Bridging the Property Tax Gap: Impact of School Division and Municipal Taxes on Manitoba Farmland. Highlights of the report show:

• From 1990 to 1999, school taxes increased on average 6.7% per year, or 3 times more than the average inflation rate.
• In 2000, the total tax burden on the average Manitoba farmer was $4,659, (the sum of the $3,181 farmland property taxes and the $1,680 in residential property taxes.)
• A wide tax gap exists from one R.M. to another in terms of the impact of property taxes on individual farmers. The average farmer in the R.M. of Hanover was charged $2,445 in farmland and residential property taxes. Meanwhile, the average farm in the R.M. of Cartier was charged $9,359 to cover the farmland and residential property tax bills.
• A wide tax gap exits from one R.M. to another in terms of the dependency on farmland to pay school division taxes. In the R.M of Alonsa, school division taxes on farmland account for a remarkably high 87% of the total school division tax base, compared too only 1.75% in the R.M. of East St. Paul.

"The lopsided school division tax burden on farmland is rooted in the structure of the property tax system itself that discriminates against businesses (farms) whose mode of operation depends on a large property base," noted Vrsnik. "The system is unfair and profit-insensitive because it fails to link the value of farmland to the income it produces."

To remedy the burden of unaffordable and profit-insensitive school taxes, the CTF is calling for:

• The elimination of school division taxes levied on farmland;
• The province and school divisions to freeze school taxes and work toward annual school tax cuts;
• The extension of the Taxpayer Protection Act to municipalities and school boards so that all school and municipal tax increases must first be passed by voter approval through referendum; and,
• A provincial review of the school tax system to explore alternative education funding mechanisms.

"Manitoba farms should not be treated like a cash cow. School boards will have to stretch their current dollars farther and the province will have to arrive at a new funding formula to ensure standard education needs are satisfied, " concluded Vrsnik.