The shell game is a popular trick that dates back to ancient Greece. A magician places a pea underneath one of three shells. He then rapidly moves the three shells around while those watching try to guess which shell has the pea. More often than not, onlookers guess wrong. Sometimes the pea even disappears entirely only to reappear in the magician’s hand.
It’s such a simple game that just about anyone can play—even provincial governments. Here’s how. First, the government needs to pick an area that falls exclusively under its jurisdiction. Next it should delegate limited decision-making powers over this area to locally elected boards. Then the government should give these boards the ability to levy their own taxes but retain the right to mandate new initiatives and programs at any time. Finally, the provincial funding formula for these boards needs to be kept as convoluted as possible so people don’t bother trying to understand how it all works.
This way the province gets to take credit for expensive new programs while passing the blame for any tax increases to the locally elected boards. To make the shell game even more convincing, provincial cabinet ministers can periodically issue public statements urging these boards to hold the line while simultaneously dumping additional responsibilities on them.
Of course, this is exactly how the Manitoba government funds public education. The province provides an annual grant to each school division based on their total enrolment, but also expects school boards to levy local property taxes to help meet their bottom line. Since the funding increases provided by the province always fall below what school boards need to maintain the status quo, we see regular property tax increases across the province. In this shell game, taxpayers always lose.
Thus, school boards find it virtually impossible to hold the line on taxes, especially since the province keeps dumping additional responsibilities on them. For example, when the provincial government mandated new physical education courses for grades 11 and 12 students several years ago, it provided only a small percentage of the money needed to hire additional gym teachers and secure additional space. School boards had to find more money elsewhere.
Similarly, during the last provincial election, the NDP promised to cap class sizes in all K-3 classrooms at 20 students. This is a huge ongoing cost that school boards will have to cover, especially when you consider how many additional teachers and extra classrooms are needed. Only NDP spin doctors seriously believe the promised $105 million in extra provincial funding will cover the cost. Homeowners can expect to pay the difference.
Even when school boards find ways to reduce expenditures, the province often prevents them from doing so. Back in 2008, there were 13 schools slated for possible closure, most of them in the City of Winnipeg. However, the provincial moratorium on school closures put these plans on hold and forced school boards to keep near-empty buildings open. Not surprisingly, school boards and their ratepayers were left to pay the bill.
So how do we put an end to this education funding shell game? The answer is simple—fund public education entirely from provincial revenues. This would force the province to take responsibility for any additional costs they impose on school boards.
The FRAME 2012-2013 budget report for school divisions indicates that school boards together expect to receive $771 million in property tax (the special support levy). At the same time, the province provides an education property tax credit to homeowners of approximately $300 million per year. If we cancel the tax credit, the province only needs to find $471 million (3.4%) in general revenues to replace the special support levy. With a provincial budget of more than $14 billion, it should be possible to find 3.4% somewhere else.
If the province wants to transition away from property tax more gradually, it could roll the entire special support levy into the education support levy and then reduce it by a set amount each year. Schools boards would no longer be obligated to hike taxes every year and would instead receive a set amount from the province.
Ending the education funding shell game may make it harder for the government to deflect blame for its excessive spending to school boards, but, of course, taxpayers won’t mind. In fact, NDP spin doctors are the only people who stand to lose.