Many Manitoba farmers are bracing themselves for another property tax hike. Despite a recent reduction in the portioned assessment on farmland that is subject to taxation, reassessments on farm properties across the province are on the rise.

Manitoba farmers are no strangers to the crucible of natural disasters and unstable commodity markets. These are the risks borne by the Manitoba farmer. But who in the business would have anticipated the exacting cost of school taxes on farms.

According to a recent study by the Canadian Taxpayers Federation (http://www.taxpayer.com/studies/Manitoba/ManitobaSchoolTax.pdf), school taxes in Manitoba rural municipalities increased on average 6.9% per year, between 1990 and 1999. That's triple the average annual rate of inflation.

Property taxes on Manitoba farmlands are broken down by municipal taxes paid to local government and school division taxes paid to local school boards. The provincial education support levy is charged on farm residences but not farmlands.

The level of school divisions' dependency on taxes generated from farmlands varies from one R.M to another. Overall, $107 million in school division taxes was collected in Manitoba rural municipalities in 2000. Of that, $37 million or 34 percent was collected from taxes levied on farmland alone.

But in some municipalities, the school division taxes on farmland are remarkably high. In the R.M. of Alonsa, school division taxes levied on farmland account for 87 percent of the total school division taxes, compared to only 1.75 percent in the R.M. of East St. Paul.

The impact of school division taxes on individual farms also varies from one R.M to another. The average farmer in the R.M. of Hanover was charged only $923 in school division taxes. Meanwhile, the average farmer in the R.M. of Cartier had to cough up $5,430 in 2000 alone to cover the school division taxes on their farmland.

The school tax burden only compounds the latest problems of flooding, low commodity prices, and unfair international farm subsidies. The only difference between these four curses is that the provincial government is in a position to do something about the grossly unfair school tax burden.

The province's latest attempt to alleviate the property tax burden by lowering the portioned assessment on farmland from 30% to 26% is commendable but falls short of effective tax relief.

The lopsided school 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. The property tax system has shown itself to be profit-insensitive.

For example, a high-tech dot.com company run from a garage has made instant millionaires out of many young entrepreneurs who pay next to nothing in school taxes. Meanwhile, a farmer may face a loss in a given year but still have to pay a $5,000 school tax bill. The system is unfair 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, school division taxes should be lifted off properties classified as farmland.

To legislate against annual school and municipal tax hikes, the province should extend the scope of the of the Taxpayer Protection Act to school boards so that all school tax increases must first be passed by voter approval through referendum.

Finally, the province should also conduct a comprehensive 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.