Back to: Finance
Public School Finance in Saskatchewan: An
Introspection
by Vivian Hajnal
SSTA Research Centre Report #95-01: 92 pages, $17.
| The Context for Funding Public Education | This report by Dr. Vivian Hajnal was commissioned to review the financing of elementary and secondary education in Saskatchewan. Included in the report is an assessment of education revenue and spending, historical information, how boards are coping with grant reductions, and issues and options for consideration. There has been a significant shift in the source of educational resources away from the province to the local tax base over the past decade, and school boards have made significant efforts to reduce their spending. Expenditure reductions have been made in a manner that minimizes the impact on students. Education funding is at a crossroads and there are significant decisions to be made. |
| Funding of Education | |
| Spending on Education | |
| Assessing Spending on Education | |
| Sharing the Tax Base |
|
| Sharing the Tax Burden | |
| Historical Scene for Saskatchewan |
|
| How School Boards are Coping |
|
| Major Issues | |
| Administrative Practices of Others | |
| Organizational and Operational Changes | |
| Summary |
|
| Issues for Discussion | |
| What Level of Services and Support Should Public Education Provide? | |
| How Can We Encourage Efficiencies in the Educational Systems in the Province? | |
| Sources |
Back to: Finance
The SSTA Research Centre grants permission to reproduce up to three
copies of each report for personal use. Each copy must acknowledge the author and the SSTA
Research Centre as the source. A complete and authorized copy of each report is available
from the SSTA Research Centre.
The opinions and recommendations expressed in this report are those of the author and may
not be in agreement with SSTA officers or trustees, but are offered as being worthy of
consideration by those responsible for making decisions.
Winds of change are buffeting the educational community in Saskatchewan. While experiencing demographic changes, school divisions are responding to curriculum and instruction initiatives begun in the 1980s. They are contending with an increasingly tax weary public and a provincial government which has cut funding to the K-12 system. This document examines public school finance in Saskatchewan, with historical comparisons to other provinces. Based on financial data, it also describes how school divisions are trying to do more with less.
This document examines the revenue and expenditure patterns of the provincial government and local governments over the last three decades. Although centred on Saskatchewan statistics, it compares the spending on education among provinces. It assesses the educational effort that is required in Saskatchewan. It reports on the revenue and expenditure patterns of the school divisions since 1989. Specifically, it describes how the school divisions have coped since 1992.
In 1993 Saskatchewan had approximately 196,000 school aged children enrolled in kindergarten to grade 12. These students were distributed throughout a geographical region covering 650,000 square kilometres. In the 122 school divisions managed by a board of education, the enrolments ranged from as few as 12 to as many as 25,000. These school divisions were part of a Catholic separate system or a public non-denominational school system. The number of students and school divisions, and the amounts spent on education (over $5000 per student), emphasize the importance of the topic.
Canadians believe that education is an important investment that bestows benefit on individuals and society. This conviction is supported by compulsory attendance and free education. Compulsory school attendance until the age of 16 is required by most provinces. Education in the elementary and secondary levels is ostensibly free to the participants. The benefits of education include both monetary and non-monetary dividends. Although the monetary rewards for education often include a higher income for individuals, a major component of the benefit of education accrues to society and government. The functioning of democracy rests on a literate citizenry.
Because the benefits of education accrue not only to the individual but to society at large, education is perceived to be a public good and provided without cost to the students at the elementary and secondary levels. In Saskatchewan, public school education is primarily supported by provincial and local levels of government. However, the federal government has responsibility for the education of certain groups and is consequently involved in purchasing educational services. Additionally the federal government provides transfer payments to the province in support of equalization of fiscal capacity and specific social programs.
The amount of money that Saskatchewan residents annually spend on education for their children in the public K-12 system has nearly reached $1 billion. This expenditure is funded on a shared cost basis from local and provincial revenues. Local property taxes levied by boards of education and collected by local government, and provincial support derived from taxes and other ancillary sources are the primary sources of the funding for public schools.
Provincial funding for education is generated from personal and corporate income tax, consumption taxes (including sales and fuel), health and insurance levies, natural resource revenue, licenses and permits, return on investments, and general and special purpose transfer payments. The percent contribution of each of these sources to the provincial coffers has varied over the last three decades. This variation in source is presented in Table 1. Considering that the 91/92 figures were estimates and will be adjusted, changes were examined with regard to the two decades from 1967/68 to 1987/88. As a percent of total revenue, personal income tax increased significantly, while fuel taxes, health and insurance levies, and transfers from the federal government decreased.
In 1987-88, receipts for the Saskatchewan government totalled $4,445.9 million. Of this amount in millions, personal income taxes provided $796.4, corporate taxes $128.4, real property taxes $.6, sales taxes $460.6, motive fuel sales $161.2, alcoholic and tobacco taxes $90.0, other $2.0, health and insurance levies $80.8, miscellaneous taxes $141.8, natural resource revenues $476.0, privileges, licenses and permits $86.0, sales of goods and services $204.1, return on investments $829.4, other revenues from own sources $15.8, and transfers from federal government $972.8. On a per capita bases, the revenue was $4300.
Currently the federal government is examining the terms and conditions of transfer payments to the provinces. Because of the heavy reliance in Saskatchewan on transfers from the federal government (24% in 91/92), educators at all levels must be concerned about any changes.
In 1991, property and related taxes contributed 37.2% of local government revenue, down from 45.8% two decades earlier (see Table 2). However, during the years from 1977 to 1991, property tax remained steady at approximately 37% of the revenue. The other major contributor to local revenue was transfers from other levels of government During the last three decades the proportional funding of transfers has fluctuated. Transfers contributed 45.6% of the revenue in 1991, 40.3% in 1967, and 49.4% in 1977.
The amount of funds available for education from the province is affected by the other responsibilities of the provincial government. Table 3 presents the Saskatchewan government expenditures for selected years. During the last three decades, transportation and communications, as well as education were allocated a much smaller share of the annual provincial expenditure. Expenditures on education, as a proportion of total expenditures, decreased from 23.0% in 1967/68 to 13.9% in 1987/88. However, debt charges increased to 24.2% of expenditures in 1987/88 from a 1967/68 level of 8.1%.
Two anomalous situations in Table 3 deserve attention. Although health decreased to 21.5% of the budget in 1987/88, estimates for 1991/92 indicated it would again consume 26.0% of the budget. In 1991/92 resource conservation and industrial development required a 15.4% share of government expenditure, while in 1988 this requirement was only 6.6%.
On a per capita bases spending by the province in 1987-88 was $4800. This compares with revenues of $4300. Consequently the provincial government spent approximately $500 more per person than they received in revenue.
The Saskatchewan government revenues have not kept pace with the expenditures. Since 1982 expenditures have exceeded revenues. In 1986-87 the annual deficit reached its highest point at $1,116.6 million dollars. The last row of Table 3 provides the information concerning the surplus or deficit for the years under examination. Consequently, the province has accumulated a significant debt. This is clearly reflected in the much larger proportion of expenditures that is now allocated to servicing the debt. Although the provincial government is reporting that there will be a balanced budget for the 95-96 year, the issues with the accumulated debt will not disappear. The good news may be that there will be no deficit for 95-96; the bad news is that debt charges will continue to consume a large portion of the dollars which would otherwise be available for other purposes.
At the local level, funds for education are constrained by the demands for other local services. While the proportions of the budget allocated to transportation and education have decreased, the proportions allocated to protection of persons and property, health, and recreation and culture have increased (see Table 4). Spending on education, although consuming nearly half of the revenues available to the municipalities, decreased proportionately from 47% to 42% during the last 25 years.
Although school boards have the authority to level a mill rate on taxable assessed property within their jurisdiction, the tax revenue is collected by the municipalities on behalf of the school divisions. The assessments in the province are conducted by the Saskatchewan Assessment Management Agency (SAMA) and the four large cities. SAMA is administered by a board with representatives from the Saskatchewan Association of Rural Municipalities (SARM), the Saskatchewan Urban Municipalities Association (SUMA), the Saskatchewan School Trustees (SSTA) and the province. Although school divisions have no restrictions on the mill rate they may set, they are in competition for property tax dollars with local government. The perception of tax weariness amongst ratepayers and the consequent perceived inability to substantially increase mill rates suggests that there is a de facto maximum mill rate.
Assesing Spending on Education
In order to assess the ability and effort of the province to fund education, several analyses were undertaken. Additionally assessments of burden for education and health services are provided. The results of these analyses are presented in Appendix A. The tables provide a unique comparison. In each table, one row presents the statistical information for Saskatchewan as compared to the national average and includes Saskatchewan ranking vis a vis the other provinces, excluding the territories.
Because education is a provincial responsibility, expenditures for education vary from province to province. Spending on education examined on a per pupil bases showed considerable variance across the provinces (see Appendix A, Table 1A). However, the variation in provincial spending on education decreased over the last decades as the coefficient of variation, found by dividing the standard deviation by the mean, declined from 27% in 1966 to 12% in 1989. Table 1A, based on actual expenditures, indicated that in 1989 Ontario spent the most on education ($6 212/ per pupil enrolled) while Prince Edward Island spent the least ($4 178/ per pupil enrolled). Saskatchewan spent $4 926 per pupil and consequently ranked 8th in per pupil spending on education. Over the decades, Saskatchewan has ranked between 3rd (1967) and 8th (1989) in per pupil expenditures. Per pupil costs for Saskatchewan from 1989-93 are presented in a following section.
By examining total spending for public elementary and secondary education as a percentage of provincial personal income (see Table 2A) and as a percentage of consolidated provincial and local government spending (see Table 3A), the assessment of effort becomes clearer. Table 2A indicates that in 1989 British Columbia made the least effort (3.97%) and Newfoundland made the greatest effort (6.66%). Saskatchewan's efforts ranked 4th at 5.52%. It is interesting to note that from 1965-70 Saskatchewan spent proportionally more on education as compared to total personal income (ranked 1st to 3rd) than it did in the 70s and 80s (ranked 3rd to 8th). Table 3A indicates that when comparing total spending on education to total consolidated spending British Columbia again made the least effort (14.40%), and Ontario made the greatest effort (18.49%). Saskatchewan's effort at 15.33% ranked 6th. Over the last three decades Saskatchewan's effort has ranked as low as 9th and as high as 4th.
A last assessment of effort is provided by the comparisons of public school expenditures with the Gross Domestic Product and the Education Price Index (EPI). In Canada between the years 1985-86 and 1989-90, money spent for education was rising more slowly than increases in the economy. For example, increases in expenditures per student were smaller than increases in the Gross Domestic Product per capita. (Statistics Canada and Council of Ministers, 1992, p. 41). However, during the same period, increases in expenditures for education were greater than increases in the EPI, a measure of the cost of purchasing a constant set of goods and services by school boards. For Saskatchewan the increase in public school expenditures was 19.59% while the increase in EPI was 14.13%. In Canada, the increase in public school expenditures was 28.27% while the increase in EPI was 17.87%
An examination of spending on education must consider the provinces' ability to pay. There are several measures of financial ability and they include personal income per capita and consolidated provincial and local government revenue per capita. Table 4A presents information on personal income per capita. The variation in personal income per capita by province decreased over the last three decades, as the coefficient of variation decreased from 22% in 1966 to 12% in 1992. Based on personal income per capita by province, Saskatchewan ranked 6th in 1989 and 7th in 1992. While the personal income per capita in 1992 for Canada was $21 827, for Saskatchewan it was $18 448. Saskatchewan's per capita income represented 85% of the Canadian average. While always below the national average, Saskatchewan has ranked between 4th and 7th over the intervening years. Table 5A presents the information on consolidated provincial and local government revenue per capita. With per capita revenues of $6 231 for Canada, $6 240 for Saskatchewan, and $6 866 for Alberta, Saskatchewan exhibited in 1990 the 4th greatest ability to pay, while Alberta exhibited the greatest ability. Both measures of ability to pay place Saskatchewan in the middle ranking when compared with other provinces.
The cost of providing educational opportunities for the children in Canada is an expensive undertaking. While many educators believe that our governments underinvest in public education, other groups believe that our public school systems consume more resources than they really need.
One way to evaluate the level of investment required for education is to look at dependency ratios. Table 6A presents the dependency ratios for children measured against the population of working age. The percentage generated by dividing the population of children in the age group 0-17 with the population of adults in the 18-64 year range is provided in this table. For 1993 Saskatchewan had the highest dependency ratio at 49.2% and was 126.5% of the national average. Quebec had the lowest dependency ratio at 36.6%. Saskatchewan has the distinction of having the highest dependency ratio since 1989.
A second measure of educational burden is provided. Comparing the elementary and secondary enrolments as a percentage of the employed labour force gives a slightly different perspective. Table 7A indicates that in 1991 Saskatchewan had a lower educational burden than each of the Maritime provinces, but was still at 112% of the national average, considerably greater than other provinces.
The amount of money available for education is influenced by the needs for other government programs. Dependency ratios concerning older residents are another measure of burden that are frequently examined. Considering the ratio formed by the population of individuals 65 and over compared to the population of working age, 18-64, presents another serious issue (see Table 8A). For 1993, Saskatchewan had the highest dependency ratio at 25.1% and this was 135% of the national average. Alberta had the lowest dependency ratio at 14.8%, which was 80% of the national average. Since 1966 we have had either the second highest or the highest dependency ratio.
As the needs for education and health services are to a large extent defined by these ratios, these three comparisons clearly indicate that the province has onerous needs, both for youth and for the older residents than do other provinces. As a result of the age distribution of the population, Saskatchewan is facing needs beyond those of other provinces. These needs will not disappear. This province has a larger proportion of young people of school age and a larger proportion of individuals over 65. In other words there are fewer people of working age to support those who are not working. There are fewer people to pay the taxes required for support of services such as education and health.
The high political visibility, the importance to school boards and local governments, and the stable level of the property tax base are causes for concern for partners sharing this tax base.
Increasing the mill rate by one partner restricts the other partner's ability to do the same, and increases in the mill rate for education crowd out potential increases in other local government mill rates. The perception of tax weariness amongst ratepayers and the consequent perceived inability to increase dramatically mill rates is leading to discussions on other ways to finance services, or on what constitutes appropriate access to the tax base. The recent declines in the proportion of educational expenditures that provincial grants cover and the increases in the proportion that property taxes must provide exacerbates this discussion.
In Saskatchewan the assessments for property tax purposes in the province are conducted by SAMA primarily; however the four large cities are responsible for their own assessments. SAMA is administered by a board with representatives from SARM, SUMA, SSTA and the province. Whereas the current assessments are based on 1965 replacement cost, future assessments will be based on current costs.
The move to current values is creating a great deal of apprehension among the partners. While many small communities have decreased in economic importance, others have survived and even prospered. With the introduction of market considerations, the declining communities will experience a decrease in property assessments, while the thriving communities will experience an increase in assessments due to higher market values. In many instances declining and thriving communities are found in the same school division. Consequently the financial burden for education in the division will shift to the thriving communities and farmland. Obviously this will be advantageous to one set of tax payers, and disadvantageous to the other.
While local government is in the business of providing services that produce a local benefit, school boards are in the business of providing a service which, while providing a local benefit, more clearly has general benefit to society. This statement argues against the case for removing education from the property tax base as there is a local benefit, but it points out the need to determine an appropriate distribution between provincial and local funding. While SSTA asked that the province enhance funding so that grants support 60% of the cost of education, other groups are suggesting that grants cover 75% or even 100% of the cost of education.
Clearly the issues in financing education must be considered in the context of the evolving provincial-municipal system and the need for local control of education. While property taxes are not directly related to ability to pay and the benefit derived, they continue to be a reasonably fair and efficient way to provide for services (Bird & Slack, 1993). In the province with the smallest proportion of working age constituents, and heavy demands for services for children and the elderly, property taxes, although problematic, remain a necessity.
The Saskatchewan Scene: 1989-95
This section examines the patterns of revenues and expenditures that are evidenced in the Saskatchewan school divisions during 1989-95. This time period is of interest because it is recent and decreases in funding occurred during 1992-1995. The historical information presented herein is based on the financial information provided by Saskatchewan Education, Training and Employment. The effects of funding decreases are described in the second part of this section and are based on a recent (June 1994) survey of school boards.
Historical Information
The historical data are neither as accurate, complete or as timely as might be required. The Saskatchewan School Divisions Statistical Information, Based on the Calendar Year, published by Saskatchewan Education, Training and Employment was not available for 1992. The same publication for 1993 was not available in September of 1994 and was not expected until December, 1994. This placed a limitation on the historical analysis. From the audited financial statements, data that were available by school division for the 1993 calendar year did not include subcategories. Data available on printouts by some subcategories, only included the budgeted figures for 1993. Consequently for 1993 this report is based on the audited financial statements in some instances, while in other instances it is based on budgeted figures. Differences between the two sets of figures compelled the use of the audited financial statements wherever possible. For example, the amount budgeted for reserves was 50% of the amount reported in the audited financial statements. As well, the revenues and expenditures for 1993 were not balanced with a difference of approximately $700,000.
Changes in the patterns of receipts and expenditures were always important, but in these recessionary years the changes took on more importance. The Minister of Finance and the Minister of Education, Training and Employment announced reductions in operating grant funding to school boards of 2% for 1992-93, 2% for 1993-94 and 4% for 1994-95.
Since 1989 the support for education from property taxes increased from 45.2% to 49.1% of the total operating revenue (see Table 5). Concurrently the grants from the province decreased from 46.9% of total operating revenue to 43.2%. For a complete description of revenues see Table 1B in Appendix B.
The ratio of taxes to grants is not constant among the province's school divisions because of the way the foundation program is designed to achieve equalization of the local property tax burden. Table 6 reports on revenues using the historical classifications of Saskatchewan Education, Training and Employment. The top half of the table deals with actual amounts in millions while the bottom half deals with proportions. From this table it is clear that 58% of the funding for education in the city public divisions is generated from taxes, while 35% comes from provincial grants. Property taxes in the rural school divisions contribute 50% of the revenue, while grants support 46%. The northern divisions (77%) and villages (56%) are most dependent upon provincial grants.
The cost of education on a per student bases increased in 1990 and 1991 by approximately $220. Expenditures decreased in 1992, approximately $17. In 1993 the decrease was approximately $28. These data, excerpted from Table 2B, Appendix B, are presented below in Table 7. The full effect of the decreases in funding from Saskatchewan Education, Training and Employment are not yet reflected in the financial statements.
Percent changes in the categories that compose the expenditures are presented in Table 8. The three columns present the changes from 1992 to 93, 1989 to 92 and 1989 to 93. Viewed across the three columns it is evident that debt charges have decreased and special projects have received less money than previously. Reflecting the demise of the Education Development Fund (EDF), the greatest percentage decrease was for special projects. Contribution to capital has also fluctuated during the last five years, whereas the provision for reserves steadily increased. The amounts spent on other education services also have fluctuated, but the 1993 totals are as yet subject to change. Consequently, no firm conclusions can be drawn concerning other education services. Nevertheless in absolute dollars this is a very small part of the budget. Pupil transportation increased 3.7% during the five years.
The information on expenditures in absolute dollars is presented in Table 2C. From 1989 to 1992, total expenditures increased by $70 million. Primarily this increase was due to an increase in the category of instruction. The subtotal for instructional salaries increased $50 million and the subtotal for other instructional expenses increased $20 million. In 1992, $651 million dollars out of a total budget of $983 million was spent on instruction.
Expenditure patterns varied across type of school divisions (see Table 9). The top half of the table deals with actual amounts in millions while the bottom half deals with proportions. Expenditures on administration ranged from 1.9% for city separate to 3.9% for the northern divisions. Costs for instruction ranged between 50.5% for northern divisions to 71.9% for towns and 71.8 for city public. Pupil transportation ranged from 0.5% for the comprehensive schools to 12.2% for rural schools. Patterns reflecting the provincial expenditures are presented in the final column.
Although the analyses in this section do not allow for a complete picture of the recent changes, we can begin to see what choices boards made or were forced into making. The data from the 1994 survey of boards further adds to the picture.
In June of 1994 a survey was distributed to all school boards in the province. This section of the monograph reports on the results of this survey. Fifty-seven of the school boards responded to the survey which asked what changes they had made to revenues and expenditures for 1993-94 and 1994-95 or planned to make for 1995-96. A summary of their comments is included in Appendix D. Table 1D describes changes to revenues in 1993-94 and 1994-95. Table 2D describes changes in expenditures in 1993-94 and 1994-95. Table 3D describes revenue changes planned for 1995-96, while Table 4D describes expenditure changes planned for 1995-96. Table 5 D describes the specific organizational and operational changes that occurred during 1992-94.
This section deals with the range of ways in which boards were coping. It does not imply that all boards took a particular action. For example, read the comment "student fees were increased", to mean that at least one board that responded to the questionnaire reported that student fees were increased.
A variety of approaches were utilized to increase revenues available to school boards and schools. All school divisions reported either increasing the mill rate or holding it at the previous level. This is supported by the review of mill rates published by SSTA. On June 9, 1994 they reported that the weighted average mill rate had increased from 71.62 in 1993 to 72.72 in 1994 - an increase of 1.10 mills.
At the school level, more emphasis was placed on the recovery of costs for such programs as industrial arts and home economics (see Table 1D). Students may have been charged a small fee for items that were consumed during the year. In some instances students were required to pay for books and resources required for the new curriculum. Student fees were increased. Students were charged user fees for extra-curricular programs.
Parents and other organizations were seen as active participants in the generation of additional revenue. Parent associations and service organizations purchased particular items for the school and conducted fund raising activities such as bingo. With a charity status, one school division was able to obtain a gasoline rebate. Some school divisions were consolidating partnerships with business.
Staff from all levels were viewed as resources and utilized in the quest for additional revenue. Some school divisions charged full salary rate for consulting by their employees to other divisions, where previously they had charged the substitute rate. In one division a secretary-treasurer was contracted to another division. In another division, twenty percent of a speech pathologist's time was contracted to a First Nation.
Wherever possible rental revenue was increased - for adult groups, regional colleges, classroom space for another school division, and from other leasees. Surplus assets, including teacherages and buses, were sold. A maintenance shop was amalgamated with a division office.
The variety of approaches included using reserves and finding new students. Some reserve allocations were used for implementing the language arts curriculum. One school division invited several foreign students to attend school in the division. A few divisions mentioned new agreements with First Nations.
In planning for 1995-96, boards were exploring more ways to raise funds (see Table 3D and 4D). They were looking at partnerships, examining student fees, and pursuing the rental of excess space. They were examining the amalgamation of schools and of school divisions. Distance education was being given serious consideration. Some boards were looking at revenue and expense items they had not already changed during the last few years, while others were looking to do more of the same.
Reduction of expenditures was achieved in most budget categories (see Table 2D). The number of personnel was reduced by not replacing employees who left or retired, decreasing the number of work hours or days for hourly employees, reassigning duties to other employees, sharing employees, eliminating positions in administration, removing the designation of vice-principal, reducing non-homeroom professional staff, cutting the library clerk, discontinuing the school social worker position, reducing the consultant positions, reducing the number of teacher aides, eliminating the computer systems person, and reducing the number of teaching staff.
Some schools were closed. Classrooms were closed. Grades were discontinued or added to specific schools. Divisions reported that they now have single, double, triple and quadruple grade classes.
School budgets were also reduced and made more inclusive. In some instances the money available for professional development was severely curtailed.
Programming for students was affected. Some divisions eliminated the alternate education school program, reduced the swimming program, reduced the skating and skiing programs, conveyed more high cost students to another division, delayed implementation of core curriculum, eliminated the home arts program, cut guidance in the high school, eliminated the band program, terminated core French, eliminated the gifted program, and eliminated student scholarships. Christian ethics and a choral program were cut. The number of secondary options was reduced to the minimum high school requirement. Supporting existing initiatives became a priority, as opposed to proceeding with new initiatives.
Equipment purchases were reduced and in some circumstances second-hand equipment was purchased. Schools solicited donations of equipment. Textbook, supply and library purchases were scaled down.
Many things changed in plant operation and maintenance. Because there were increased costs for water, electricity, gas, caretaking and maintenance supplies, reductions had to be made elsewhere. In some instances no new improvements were made to the schools. Building repairs were delayed unless an emergency situation arose. Painting schedules were extended. Updates to appraisals for building and maintenance employees were foregone. However, more emphasis was placed on energy efficiency and preventative maintenance programs.
Caretaking staff was reorganized. Some janitors were converted to contractors who were responsible for buying their own supplies. Custodial staff were required to take on more minor repair jobs. More maintenance was scheduled to be done in winter in-house. Managers were required to do tasks other than management.
A number of boards reported that they had reduced the number of bus routes and reduced the route mileage. Some divisions were purchasing used buses. Others were buying only one new bus a year where they had previously bought two or three. Boards reduced special events transportation. New busing contracts were negotiated. To generate savings in fuel costs, some buses were changed to run on natural gas, while other divisions purchased diesel buses.
The amount of reserves was increased in some divisions and decreased in others. Reserves were increased in 1993 to help offset the planned 1994 grant decrease, to offset uncollectible taxes, to help pay construction of a new school, and to provide a cushion for contract negotiations. Reserves were decreased to purchase new buses, to balance budget, to update equipment for information processing and accounting, and to provide computer labs.
In response to the question concerning the major issue concerning education finance in their division, boards identified the following:
Administrative Practices of Others
When reviewing the administrative practices of other governments, school boards made the following observations: The decisions on price increase of Sask Power, Tel and Energy after grants are announced and budgets finalized were a particular vexation. They added to the perception of down-loading of costs to the boards. The downsizing of Saskatchewan Education, Training and Employment resulted in greater delays in receiving information. The decision to give teachers an increase in salary in 1994 impacted on salaries for all employee groups in the division. Saskatchewan Education, Training and Employment funding reductions of 2-2-4% translated into grant reductions of varying sizes. One board reported their grant reductions were in fact 4-4-8%. Withdrawal of the EDF funding inhibited the ability to maintain the technological areas as well as the library resources. Decisions at the local municipality level cause concern for some boards. Tax revenue was lost due to cancellations and discounts. Some boards mentioned the positive relationship with the municipalities. Decisions of the federal government affected the UI and CPP costs. Boards, although unhappy with the reduction in funding from Saskatchewan Education, Training and Employment, appreciated the early notification of the decreases.
Organizational and Operational Changes
School boards illustrated the changes to their organizations and to their operations. Many of the changes described have already been included in the sections on revenues and expenditures. For the complete detail see Table 5D in Appendix D.
Boards recognized that there was a greater workload for all, as duties of personnel lost through downsizing were assigned to those who remained. Reductions were made at the schools and at the division level, in academic and in non-academic positions. They reported less money to spend, even for professional staff. As a result many of them increased their PTR. They reported more frequent double-grading with some triple- and quadruple-graded class rooms.
Boards described an increase in the number of students with special needs. Mainstreaming was continuing. Class sizes in congregated classes was also increasing. Some divisions reported increasing the number of paraprofessionals used.
The respondents to the survey reported the closing of schools. Declining enrolments and reduced funding were viewed as the impetus. However, there was a suggestion that even when a school might be of questionable viability from a fiscal and programme point of view, it was difficult for the community to sanction its closing.
The required programming for schools was suffering. Resources for libraries and technology were greatly curtailed. The timeline for the implementation of core curriculum was extended. Rather than proceeding with further implementation plans, supporting existing initiatives became the priority. Changes, including reductions, to optional programs were described.
Changes in governance were also mentioned. One division reported consolidating its financial administration service with another division. An amalgamation pilot project was described. Another respondent reported that informal discussions with neighbouring divisions revealed no will to pursue amalgamation.
School boards are responding to the need to change by proposing new solutions and striving for efficiency. The words of one respondent describe the dilemma:
"Over the last three years the Division has absorbed most of the increased costs and decreased revenues. This has been done by increasing PTR and becoming more efficient. We have now reached the stage where programs and services are being reduced."
Education has received a declining share of government expenditures.
The province is faced with rural depopulation and as a consequence schools in these areas face declining enrolments.
The education community is facing increased demands, to change, to be more accountable, to be more inclusive, to add extra responsibilities, and to introduce new curriculum and programming.
School boards are encountering a tax weary public, which includes the partners who share their property tax base.
Boards are confronted on a daily basis with changes that other provincial governments are making.
As a result of the age distribution of the population, Saskatchewan is facing needs beyond those of other provinces. These needs will not disappear. This province has a larger proportion of young people of school age and a larger proportion of individuals over 65. In other words there are fewer people of working age to support those who are not working. There are fewer people to pay the taxes required for support of services such as education and health.
Tinkering at the margins will not alleviate the financial stress on education The work that has already been done in the areas of finance and governance must be revisited. New ways to deliver programs using the technology that is available must be embraced. Expectations placed by government departments must not exceed the funding available to support them. Structures, programs, and methods of delivery cannot stay the same.
In the 1920s, 1930s and 1940s, Saskatchewan was the third most populous province (see Appendix E) after Ontario and Quebec. The provincial structures were designed to accommodate this prosperous position. It is now time, some sixty years later, to redesign our future based on our current situation.
Realities, Options, Issues for Discussion
This section begins with some underlying facts concerning our province and educational funding. Many issues are raised, based on these facts, on the discussion in this paper, and the comments from the school boards. These issues deserve the attention of the educational community and their partners.
Other provincial jurisdictions have grappled with similar educational funding issues. In 1992, the British Columbia Ministry of Education published Building partnerships: A finance system for public schools and the Ontario Ministry of Education presented Towards education finance reform. Although we are able to learn from their deliberations, we must examine our own context.
Three broad options are presented for your consideration. We hope that after your deliberations you reach similar conclusions.
The provincial, municipal and educational systems must be built on needs and realities of the 1990s and beyond.
Saskatchewan has more young children per working-age person than any other province.
Saskatchewan has more senior citizens per working age person than any other province.
The Federal government is downloading spending on public programs and services. This has an indirect effect on education.
Saskatchewan is spending a smaller proportion of total expenditures on education than previously, while spending a larger proportion than ever before on servicing the debt.
All provinces are spending more on education.
Since 1987 Saskatchewan has experienced a decrease in population. This decrease is most pronounced in some rural areas of the province.
Short-term increases in revenues from resources or other sources do not have a major impact on the long-term necessity for change.
Decreases in education funding have effects on programs for children.
Teaching is labour intensive. The largest proportion of the educational budget goes to professional salaries.
With regard to each of these dilemmas the people of Saskatchewan have options. The options fall on a continuum from no change to complex change.
Option 1: This option includes maintaining the status quo. We can allow our educational system to hemorrhage to the point where public education becomes an inferior education. This encourages the growth of private education and an accelerated decline of public education. One of the school board respondents describes their situation: "Over the last three years the Division has absorbed most of the increased costs and decreased revenues. This had been done by increasing PTR and becoming more efficient. We have now reached the stage where programs and services are being reduced".
Option 2: The second option includes making modest changes and waiting for the "good times" to return. Considering the demographic characteristics of our province, its geographic location in the middle of Canada, and its historical background, I feel confident in predicting that we will never reach the pre-eminence as a province that we had in the first half of this century. Rural depopulation is a fact, and schools in these areas face declining enrolments. Choosing this option has succeeded in putting us in the dilemma we now find ourselves.
Option 3: The third option suggests making major changes in governance, teaching and learning, and administrative processes.
At the provincial level, spending must be curtailed to match or lag behind revenues. In this way, the accumulated debt, and the accompanying need to spend revenues on interest payments, would decline. In the long term, money not required for interest payments could be used to support education and other provincial priorities.
Education must be prepared to shoulder its share of the cost cutting measures in order to accomplish this task. Co-operation among the education departments of the western provinces is one small way to contribute to this share.
Any and all approaches that might be beneficial in this regard must be considered. They include restructuring of school division boundaries. Two documents, School finance and governance review: Final report, and Task force on educational governance: Final report, have specifically examined these issues at great length. All parties concerned must continue to collaborate to achieve the necessary changes in boundaries. Wherever possible, boundaries co-terminus with other human service providers should be considered.
Any new approaches for raising additional revenues must be embraced. Closer relationships between homes, schools, and business communities will provide additional support for these partnerships. However, some methods to assure equity must be considered, as the tendency is for the more affluent divisions to be more successful at fund raising. Nevertheless, sufficient encouragement must remain in the system to allow for individual division or school initiative.
To facilitate teaching and learning at the diverse locations throughout the province, new technologies must be embraced. Distance education should help provide access to education. Some school divisions in the province have been leaders in this regard. We should build on their successes and learn from their failures. More and more programming will be available to students from various sources, within and beyond the borders of our province and country.
Many changes to administrative procedures are required. With the advent of technology, few excuses remain for information systems that do not provide information in a timely fashion. Budget and information system data should be collected in a standardized fashion, using appropriate subcategories. The information should be transmitted directly to Saskatchewan Education, Training and Employment for further dissemination. Other financial administrative suggestions included in the Langlois-Scharf report, such as changing the reporting year, have received support from most jurisdictions, but changes have not been agreed upon.
Option 3 does not imply an inferior education system. It suggests a radically restructured system which could lead us into the 21st century, an era when education will be less and less place-bound, and more and more important.
It is clear that funding of public education is at a cross-roads in Saskatchewan. Decisions much be reached and actions taken concerning several dilemmas. These decisions are associated with determining the level of spending and matching the delivery of education to the levels of funding available; examining sources of funding for education; and streamlining the governance structures, teaching and learning processes, and administrative systems to achieve maximum efficiencies.
From 1985 to 1989, the increases in expenditures for education were greater than the increase in costs of goods and services. However, during this time period there were changes in schools as a result of the expectations of society, the development of education theory, and mandates from the Department of Education, Training and Employment. While continuing to ask for additional changes, the Department reduced funding to school divisions during the three most recent budget years. As a result, Boards of Education are faced with some thorny questions. We invite your comments and additional questions concerning the following issues:
What level of services and support should public education provide?
1. Should the government define a common level of student outcomes and service expected?
2. Is equal access to basic education an appropriate goal? If it is, how do we assure that it is achieved?
3. Is equality of outcome an appropriate goal? If it is, how do we assure that it is achieved?
4. How should we determine the level of spending on education?
5. Should Saskatchewan Education, Training and Employment decrease the expectations concerning outcomes, to match the funding available?
How should we pay for public education?
School divisions need sufficient funds to deliver educational programs. The proportion of funds received from government grants decreased over the decade. This decrease places an additional burden on property taxes. The additional burden on property potentially decreases the municipal governments ability to access this source of funding for other purposes. The SSTA has recommended that grants should support 60% of the cost of education, while other municipal groups suggest that grants cover 75% or even 100% of the cost of education.
Grants:
1. What portion of educational costs should be born by grants from government? What funds will the provincial governments use to meet these objectives?
Property taxes:
1. Should we use property taxes to pay for education?
2. Should the property tax base be shared between the local governments and the province?
3. What proportion of education costs should be born by the local tax base to ensure local autonomy? Are there other methods to ensure local autonomy?
Alternate funding sources:
In an effort to enhance funding for education, schools and school divisions are turning to parental groups, business communities, and the interested public in their search for support. Where previously these funding sources were used for supplementary purposes, funding is now being sought for fundamental education programs. An increased role for alternate funding sources suggests that education is moving away from the principle of public funding for education - a principle that has been a cornerstone of our democratic society.
How can we encourage efficiencies in the educational systems of the province?
Major changes, frequently labelled restructuring, are necessary to support enhanced learning outcomes for all students. These complex changes can include governance structures, the teaching-learning processes and administrative procedures.
The governance structures:
The teaching-learning processes:
The administrative procedures:
Bird, R. M., & Slack, N. E. (1993). Urban public finance in Canada. Toronto, ON: John Wiley
British Columbia Education Funding Review Panel (1992). Building partnerships: A finance system for public schools. Victoria, BC: British Columbia Ministry of Education.
CTF Link (1990). Financing Public Education in Canada: A conversation with W. J. Brown, Director of Economic Services. 14(2), 1-25. Ottawa, ON: Canadian Teachers' Federation..
Langlois, H., & Scharf, M. (1990). School finance and governance review: Issues and background information. Regina, SK: Government of Saskatchewan.
Langlois, H., & Scharf, M. (1991). School finance and governance review: Final report. Regina, SK: Government of Saskatchewan.
Lawton, S.B. & Wignall, R. (Eds.) (1989). Scrimping or squandering? Financing Canadian schools. Toronto: ON: OISE Press
Odden, A. (1994). Including school finance in systemic reform strategies: A commentary. CPRE Finance Briefs (FB-04-5/94). Madison, WI: CPRE Finance Center.
Ontario Ministry of Education (1992). Towards education finance reform. Toronto, ON: Ontario Ministry of Education.
Sale, T. (1993). The analysis of school funding across Canada. Vancouver, BC: EduServe Inc.
Sale, T., & Levin, B. (1991). Problems in the reform of educational finance: A case study. Canadian Journal of Education, 16(1), 32-46.
Saskatchewan School Trustees Association (1993). Task force on educational governance: Final report. Regina, SK: SSTA.
Saskatchewan Urban Municipalities Association (1992). Recommendations for local government financing in Saskatchewan. Saskatchewan: SUMA.
Statistics Canada (1992). Public Finance Historical Data 1965/66 - 1991/92. Catalogue 68-512. Ottawa, ON: Statistics Canada.
Statistics Canada (1994). CANSIM CD-ROM Databases, 2807-2819, 5025, 5026, 5089-5099, 6367, 6378, 6430-6442, 6965, 6966.
Statistics Canada (1994). Consolidated government finance. Catalogue 68-202. Ottawa, ON: Statistics Canada.
Statistics Canada. Elementary-secondary school enrolment. Catalogue 81-210. Ottawa, ON: Statistics Canada.
Statistics Canada & Council of Ministers of Education (1992). A statistical portrait of elementary and secondary education in Canada. Ottawa, ON: Statistics Canada.
Volk, J. A. (1990). A review of operating and capital grant formulas for education in Saskatchewan. (S.S.T.A. Research Centre Report #90 -12). Regina, SK: Saskatchewan School Trustees Association.
Back to: Finance