The Saskatchewan government recently got some very good news. The province will be receiving a substantial $340 million one-time equalization payment.

And this situation poses one heck of a question for the province: What to do with this "found" money It needn't be said that a lot of people have a lot of ideas.

Interest groups from all over the map are licking their lips in anticipation of new government handouts - especially big labour unions who are currently embroiled in heated contract negotiations. And that's the downside to having unanticipated windfall revenues - labour unions looking for raises can now claim the government is awash in money and has no excuse not to cave in to their demands. If past behaviour is the best predictor of future behaviour, don't put too much stock in the government holding the line on its payroll.

That said, encouraging things have been said of late by our premier in regard to this new money. First off, Calvert announced he would live up to a deal made with the Saskatchewan Association of Rural Municipalities to put 30 per cent of new equalization money in to school tax relief. Another wise - but unlikely - idea that has passed Calvert's lips was to put extra money toward the provincial debt.

Calvert is right on both counts. Outrageous school tax bills suck the life out of our rural economy and our provincial debt has grown by $1.3 billion since 2001.

The wise move for government would be to live up to their commitment to SARM by providing school tax relief in the current fiscal year. They should also go one step further and commit to a permanent reduction and school taxes. In the last election, Calvert indicated the government had the "fiscal room" to reduce school taxes, and we all know what happened to that promise. The premier should make the decision to cut school taxes and then find the "fiscal room" to accomplish that goal without further raising other taxes. That's how things get done.

How do we go about cutting school taxes this year It's clear that, in the long term, the government needs to cut school taxes by increasing grants to school boards. The short term is a lot more complicated.

The Saskatchewan Urban Municipalities Association has established a working group on school tax reduction comprised of representatives from SARM and the School Board Association. They've outlined five possible approaches that are workable - a rebate cheque for school tax payers, a direct an income tax credit for property owners (around $100 per owner), an increase in school grants to allow boards to subsequently cut their tax take, a specific grant for school boards earmarked for tax relief, and a school tax credit applied directly to property tax bills.

Each of these approaches have downsides and they need to be debated publicly. The great news is we're talking about "how" to implement school tax relief as opposed to "if."

If any money is left over at the end of the year (highly unlikely given that our government spends more than they collect most years), it should simply be put toward the provincial debt. It's not sexy, but you won't lose votes by choosing to reduce the debt burden of future Saskatchewanians, and debt reduction means opening up room for future tax cuts.

Premier Calvert provided a long-awaited breath of fresh air for taxpayers by identifying school tax and debt reduction as priorities for the one-time money this year. Calvert should resist the obvious spending temptations and demanding public sector unions, and do what's right for taxpayers.