HomeMy WebLinkAboutTR-38-81 Memorandum
TO: Chairman & Members of the Finance & Administration Committee
FROM: Klaas Degroot, C.G.A. , Treasurer
DATE: May 22, 1981
SUBJECT: Northumberland & Newcastle Board of Education
BRIEF DATED APRIL 28th, 1981
ITEM: TR-38-81
Recommendation:
"Received for information"
Report:
The brief prepared by the School Board addresses the reason why
there would be a lower level of education taxes paid by the residents
of the Town of Newcastle if it was a part of the Durham Board of
Education as opposed to the Northumberland & Newcastle Board of
Education. In doing so they have confirmed the findings of the original
report.
On page 5 of the brief they have calculated a differential mill rate
which when applied to the assessment for 1979 provides a gross
difference of $565,111 where as the earlier report estimated a difference
of $559,000 using entirely different methods.
The brief goes on to say that this is caused by the relationship of a
school board's expenditure level to the expenditure ceiling set by the
Ministry of Education.
Appended to this report is a hypothetical example of two school boards
made up of identical municipalities. Example #1 shows the difference in
taxation with one school board spending $1,000,000 over ceiling and one
spending $1,000,000 below ceiling. Example #2 shows what happens if
a municipality moves from the board that is over ceiling to the under
ceiling board. The results are similar to that expressed in the school
board brief and the original study.
In summation the original report identified a difference in the tax level
for residents of the Town of Newcastle due to being in one school jurisdiction
as opposed to another. This is confirmed by the present brief which then
goes on to examine why this occurs and reached the conclusion that the
higher level of spending per pupil in the Northumberland-Newcastle Board
is the cause of the difference.
K. Degroot.
Example 1
Board AA v Spending $1,000,000 over ceiling
Municipality Local Equalization Equalized Sharing Educational
Assessment Factor Assessment Ratio Requisition
Millions Millions
A 10 4 250 8. 196 1 ,113,119
B 30 5 600 19.672 2,671 ,704
C 40 5 800 26.229 3,562,226
D 50 4 1250 40.985 5,566,275
E 15 10 150 _4.918 _ 667,9?6
145 3050 100.000 13,581 ,250
Local Requirement 4. 125 x 3,050,000,000 1. 1 ,000,000 = 13,581,250
1,000
General Legislative Grant 18,300,000 - 13,581 ,250 - 4,718,750
Board BB - Spending $1,000,000 below ceiling
F 10 4 250 8. 196 971,555
G 30 5 600 19.672 2,331 ,921
H 40 5 800 26.229 3,109,188
I 50 4 1250 40.985 4 ,858,366
J 15 10 150 4. 918 _582 980
145 30'.70 100.000 11 ,854,010
Local Requirement 4. 125 x 3,050 000,000 16,300,000
1 ,000 x 17,300,000 11 ,8. 4 ,010
General Legislative Grant 16,300,000 - 11 ,854 ,010 = 4 ,445,990
Example # 2
Board AA - Spending $600,000 over ceiling
Municipality Local Equalization Equalized Sharing Educational
Assessment Factor Assessment Ratio Requisition
Millions Millions
A 10 4 250 13.889 1 ,114,592
B 30 5 600 33.333 2,674,973
C 40 5 800 44.444 3,566,631
E _ 15 10 150 8.334 668,804
105 1800 100.000 8,025,000
Local Requirement 4. 125 x 1,800,000,000 + 600,000 = 8,025,000
1 ,000
General Ligislative Grant 10,980,000 - 8,025,000 = 2,955,000
Board BB a Spending $600,000 below ceiling
D - 50 4 1250 29.070 5,028,555
F 10 4 250 5.814 1 ,005,711
G 30 5 600 13.953 2,413,603
H 40 5 800 18.605 3,218,310
I 50 4 1250 29.070 5,028,555
1 15 10 150 3.488 603,356
195 4300 100.000 17,298,090
Local Requirements 4.125 x 4,300,000,000 x 23,620,000 = 17,298,090
1,000 24,220,000
General Legislative Grant 23,620,000 -- 17,298,090 = 6,321,910
SUMMARY
Example # 1 Example # 2
Taxes Board AA 13,581,250 8,025,000
Board BB 11,854,010 17,298,090
25,435,260 25,323,090
General Legislative
Grant
Board AA 4,718,750 2,955,000
Board BB 4,445',990 6,321,910
9164,740 9,276,910
TOTAL 34,600,000 34,600,000