During the budget presentation, Secretary-Treasurer Kent Reid highlighted provincial legislative changes which have impacted the budgeting process.
Bill 45, the Public Schools and Manitoba Teachers Society Amendment Act, will provide for province-wide collective bargaining, replacing division-by-division contract negotiations with their local teachers’ association. A negotiation committee is now in place.
Reid said there’s both pluses and minuses to the new arrangements.
“There’s pros and cons with everything,” he said. “We lose the relationships we have with our local associations in terms of bargaining. In Fort La Bosse, we’ve always had a good relationship where we’ve been able to come to an agreement mutually, respectfully and deal with our issues locally, but that will not happen any longer.”
Reid said once the first collective agreement is arrived at, there will be some unknowns in terms of how to budget appropriately.
“We are public sector. We are in the business of service…we are human resource strong,” he said. “So you would presume that most of your costs would come in salaries and employee benefits, which they do. We’re trying to budget what is reasonable. We don’t have any indication or direction as to what collective agreement settlement might look like.”
Bill 71, the Education Property Tax Reduction Act, has now been proclaimed by the provincial government. The transition towards progressively eliminating the funding of education through property taxes in favour of a fully government-funded model is underway. Reid said that a new education funding formula is being worked on and was supposed to have been released in late 2022. It has, however, been postponed to 2024-25. He’s uncertain as to how it will impact the local ratepayers when it does come to fruition.
“We don’t really know what the next two, three, four, five years out looks like so we’re budgeting based on what we know today.” He emphasized that without the ability to adjust what is levied locally through property taxes, the division is unable to raise additional revenue to top up what is received from provincial coffers.
“You are almost waiting for that number before you really get into the budget because there’s no other way (to raise more dollars),” he said. “In the old days we would make plans and have meetings with stakeholders. Once we received our funding, we would decide what else we could afford.”
Reid reported that the provincial government has announced a 6.1% increase in base education funding for the 2023-24 school year. He said that the division’s operating support by formula has been guaranteed to remain the same as in the current year, which saw the province provide $818,000 in additional funding support. They have committed to making this permanent and enhancing it going forward. These added dollars have enabled the Board of Trustees to avoid making reductions which would adversely affect the delivery of classroom instruction.
“The government realizes we’re entering a new dynamic in collective bargaining for teachers in the province, and it’s unknown,” Reid said. “They realize there’s pressures on school divisions, not just with inflation. We’ve just come through the pandemic and there’s lots of residual from that in terms of mental health and well-being, so they’ve provided some additional funding to address some of those needs and that’s been much appreciated from our perspective.”
For the next school year, the division is proposing a balanced budget, with a 5.6% increase in revenue for a total of $21,571,758. Salaries and benefits for the 265 permanent employees who staff the 10 schools, operations centre and division office, as well as casual and term staff, amounts to 84% of the budgeted expenditures.
The provincial special levy freeze at $9,717,329 has been extended to the fourth consecutive year, which means the amount collected from property taxes to go towards education is essentially the same. Manitoba Education provided a $509,000 property tax offset grant, resulting in a zero net effect on taxpayers. Taking the grant into account, the division received about a 5.9% increase in total funding by formula for next year; close to the province’s announcement of an overall 6.1% hike across Manitoba.
“That was good news for our division,” Reid said. “We did well in provincial funding, thankfully.”
A 9.7% drop in property assessments came as a surprise. Reid said the municipality with the highest assessment in the division, the R.M. of Pipestone, saw about a 20% decrease. This will result in a shift in the allocation of property taxes collected based on assessments. The decrease will need to be picked up elsewhere in the division.
The inflation that is eating into Canadians’ wallets has impacted division operations. Reid highlighted increases in insurance premiums, as well as a 4% increase in the interest rate for short-term borrowing needed to cover operating expenses during times of the year when funding is not being received. Another hit has come in fuel, repair and maintenance costs for the division’s 37 buses.
“With inflation as high as it is right now, it affects all of these things. We’re seeing double digit increases in costs on things like having buses repaired, buying tires, our inventory for our maintenance crew…all of those costs are going up. We can’t go without the buses in rural Manitoba. We have no choice but to budget for those fuel cost increases…same with the utilities – you can’t turn the heat off.”
BUSING A MAJOR EXPENSE
Across the division, about 700 pupils ride the school bus, and the division’s fleet travels along 27 routes about a million kilometres per year. The cost of acquiring new buses is significant, not to mention maintaining them.
“Buses have pretty much doubled in price in 10 years,” said Supervisor of Operations Mark Johnston. The purchase price of a new bus now exceeds $100,000.
“It’s high. It’s a hard one to wrap one’s head around,” he said. “That’s what we’re dealing with, with a new bus. To find that money for one or two is challenging.”
Board Chair Craig Russell said dollars are no longer set aside to buy replacement buses.
“We haven’t for several years because of the restrictions we’ve had on our finances,” he said. “We rely totally on any surpluses coming out of the school year and then we apply that to a reserve fund and through that we purchase buses. Last year we were able to buy two and we’re hoping this year we’re able to buy another two.”
Both Reid and Superintendent Barry Pitz were pleased that the budgetary process will not result in more austerity in the months ahead.
“We’re very happy that we get a status quo budget,” Reid said. “If we had got just the same as we got last year and that additional support didn’t come in, we’d be having a very different discussion. The next reductions to come are going to have to come from within our schools. It has really almost become more about keeping what we have rather than planning and investing in enhanced programming for kids.”
“We’re thankful to the province that we’re in a position where we don’t have to make some really tough decisions because it’s been several years of tough decisions,” Pitz added. “It always affects the kids. This upcoming year we will have status quo staffing so it’s a bit of a relief for all of our parents and our community.”
At the regular Board of Trustees meeting on March 13, a motion by Trustee Teresa Vandenberghe to approve the 2023-24 school year budget was approved unanimously.