HomeMy WebLinkAboutTR-13-88 TOWN OF NEWCASTLE
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Res. # '1� � d c�
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HANDOUT
MEETING: GENERAL PURPOSE & ADMINISTRATION COMMITTEE
DATE: February 15, 1988
REPORT #: TR-13-88 FILE #:
SUB.IECT:
NORTHUMBERLAND & NEWCASTLE BOARD OF EDUCATION - FINANCING
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and
Administration Committee recommend to Council the following:
1. That report TR-13-88 be received; and
2. That Staff be given authorization to engage the services of
a consultant to review the funding formula to determine if
inequities exist with respect to the apportionment of school
taxes among municipalities; and
3. That subject to recommendation #2 above, the Treasurer be
authorized to call a meeting of area Treasurers within the
Northumberland Newcastle School Board jurisdiction to review the
Consultant's Report.
BACKGROUND & COMMENTS:
At the General Purpose and Administration Committee Meeting of
January 18, 1988 Resolution # GPA-59-88 was approved. Said resolution
directed that the report requested in Resolution # C-922-86 on the
MacDonald Commission on the financing of Elementary and Secondary
Schools in Ontario and the joint statement of position from the
Northumberland and Newcastle Board of Education and it's Municipalities
be brought to the February 15, 1988 General Purpose and Administration
Committee Meeting.
. . .2
TR-13-88 Page 2
During the past year, a considerable amount of time has been incurred by
Mayor Winters and others with respect to reviewing the funding formula
used to apportion school taxes. Staff are of the opinion that no one at
the provincial or local level fully understand how the formula is
applied. This has been confirmed by the School Board Treasurer during
recent discussions in which he stated, and I quote, "apportionment of
school taxes to area municipalities does not seem correct considering
the fluctuation in assessed property values and the equalization factors
YY
as they presently exist.
The equalization factors attempt to relate each municipality's assessed
property values to the market values for property in that particular
municipality. In theory, this makes all property values in Ontario
comparable by relating it to a common standard market value. However,
when you consider that the combined assessment for Port Hope and Cobourg
exceeds the assessed property value for Newcastle, one must question why
the Town's apportionment is greater that the others. Schedule "A"
attached indicates the 1986 assessment used in 1987 taxes for the above
municipalities.
The variances in assessment base for the above municipalities is
considerable, in that Port Hope is on 1975 market value, Cobourg on
1984 market value and the Town on 1980 market value. This would seem
to indicate that based on market values as they presently exist that
Cobourg would have a higher apportionment than the Town. Also, Cobourg
has a much larger commercial industrial base for apportionment purposes.
. . .3
TR-13-88 Page 3
The above rationale has been further confirmed by the MacDonald
Commission on the financing of Schools within Ontario, wherein the
Commission states that the current method of apportioning school
requirements among Municipalities has created several inequitable
situations. For example, residential properties with a taxable assessment
of $5000 in one Municipality pay $811.00 in School Taxes in 1984, while
similar residential properties with the same taxable assessment of $5000
in a neighboring Municipality pay $573.00 in school taxes both in the same
jurisdiction of the Board of Education. Similar problems of apportionment
exist in other Municipalities of the Province. These inequities are
caused by the use of current assessment equalization factors, the
calculation of which is influenced by the relationship of the rateable
assessment among classes of assessment. These relationships vary greatly
among municipalities depending upon the extent of the Commercial and
Industrial Assessment base.
Because of the complexity associated with the funding formula and a
general lack of understanding by all parties concerned, it is
recommended that a consultant be engaged to review the apportionment
allocation procedure. Should the consultant's report confirm that the
school tax apportionment is incorrect, that the Treasurer be authorized
to call a meeting of area treasurers to review same and determine the
proportion of the amounts to be raised by each municipality as per
Section 213 (6) of the Education Act 1980, R.S.O.
Respectfully submitted,
f
fJ.R. Blanchard,
Treasurer.
JRB/pp
ATTACH:
Schedule "A"
Assessed Values
Assessment Market Value Equalization Factor
Base
Port Hope 14,725,313 1975 5.040
Cobourg 28,475,026 1984 6.70%
Newcastle 42,464,832 1980 3.26%
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