When Ralph Klein’s government took property taxes away from individual school boards more than 20 years ago, the intention was to create a system of equal funding for all of the children in the province. Previous to that, boards were responsible for deciding how much tax money would be required to meet the needs of their students. Wealthier rural areas of the province, often with industry and sparse populations, were able to raise far more property tax money for schools than communities with larger populations and costly needs.
If Klein’s government deserves credit for such a simple fix, it also deserves criticism for the host of problems its move created, essentially rendering school boards almost completely ineffective in dealing with their own fiscal situations, a problem that continues to this day. The move took away much of a board’s power to deal with local issues. For instance, when teachers demand a raise, there has been almost no point to negotiate with individual boards that can’t do much about it anyway.
While it may be comparing apples to oranges, Alberta’s NDP government is on the cusp this month of making a similar fundamental change in the way municipal taxes are distributed to solve perceived inequities between rich industry-heavy counties, such as Sturgeon and Strathcona, and their city cousins who largely depend on residential taxes. Though the province has been talking about Bill 20, a revision of the Municipal Government Act, for years, it still does not appear that municipalities have seen a draft of the changes to highly complex legislation that controls everything they can do, from advertising to development.
Perhaps the biggest change is that NDP government is already signaling that future voluntary financial collaboration between economically disparate jurisdictions will not be left to “chance.” That makes it pretty clear the province is ready to step in to force municipalities to share an estimated $1.9 billion industrial tax wealth. This will make the bigger cities without much industrial tax base happy immediately because it will help them deal with social problems such as homelessness and crime. Smaller communities and counties, however, are already arguing that their perceived windfall largely goes to fund maintenance of the heavy-duty infrastructure that heavy industry demands. Not only that, we expect them to say, but their citizens often live in close proximity to pollution the industry creates.
Many politicians, including St. Albert’s Mayor Nolan Crouse, are wisely keeping quiet about the changes until the new municipal bill is introduced at the end of this month. After that, the province has scheduled open houses this summer throughout the province. This is an important issue, and all citizens should be paying keen attention because whatever the changes, they may have unintended consequences for years to come. The province must listen and endeavour to be fair to both rural and urban areas and not unduly swayed by the party’s political base in the big cities. This law should solve problems, not create new ones.
