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Changes to Educational Finance in Ontario 2000

Changes to Educational Finance in Ontario 2000

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Review of Education Finance in Ontario, Regulations and Reports, and the New Funding Model in Ontario, 2000.
Review of Education Finance in Ontario, Regulations and Reports, and the New Funding Model in Ontario, 2000.

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Published by: returncc on Jan 18, 2010
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Changes to Education Finance in Ontario
copyright 2000
Part I : Introduction
"The Harris Conservatives came into office with an agenda to turn our education system inside out and upside down. They intentionally created a crisis. And in Oct 97 with Bill 160, they sparked a political protest byteachers, supported by parents and students, the like of which has never been seen in Ontario. Students, parents and teachers are reeling fromchaos that never seems to end." 
NDP Fact Sheet on Bill 160, 1997
From Boom, Bust to Echo.
Over the last 30 years, Ontario's spending patterns in education have changed in response to thedemands of society. In the late 1960's, early 1970's, education spending was 1/3 of the provincial budget, as compared to 1/5 spent on health care. In the early 1970's the baby boom generationrequired more classrooms than ever before. By 1975, the Province paid 60% of all educationalcosts.During the baby bust beginning in the 1980's, when costs relating to oil and gas, heating,maintenance, inflation and wages increased, the spending from the province remained static.During the baby boom echo which began filling up elementary schools in 1991, the provincialshare was approximately 40% of expenditures. The rest was raised through local taxation.In 1995, the situation had been reversed, health spending was 1/3 of the overall budget, whileeducation was 1/5 or 16% of the total provincial budget. During this period the largest growthsector in Provincial spending was debt payments which in 1995 also took approximately 16% of the total provincial budget. The same percentage spent on education.
Delegation of Power
In terms of trends within the institutional framework of Ontario's educational system, theMinistry of Education is now responsible for what was once divided up into many separateMinistries, such as the Ministry of Colleges and Universities, the Ministry of Skills, and theMinistry of Education. Streamlining these portfolio's into just one Ministry of Education andTraining was done over a period of time under the rubric of administrative convenience.The
 Education Act 
, R.S.O.,[1990] (hereinafter 
1990.)gives the Ministry virtually unlimited power to regulate in the matter of education in infinite detail. School boards are not independentcreatures but are created by the Education Act, and thereby bound by law to carry out the will of the Minister. (s.58.1 Ed. Act)
The Ministry of Education and Training has the duties outlined in s.2 of the
1990.S.2(2) E.A.1990 : The Minister "shall preside over and have charge of the Ministry."S.2(3) E.A. : The Minister of Education "is responsible for the administration of the Act and theregulations .. . as may be assigned to the Minister by the Lieutenant in Councils. 2(4) : "The Minister may in writing authorized the Deputy Minister or any other officer or employee in the Ministry to exercise any power or perform any duty that is granted to or vestedin the Minister under this or any other Act."
Part II : History of Funding Formula.
In 1894, municipalities were given the right to raise revenue from tax on property and local levies to help establish schools. In 1907, thegovernment first began to pay a sliding scale of grants based on localability to raise money, and in 1924, the government decided to use theamount of property assessment as the measure of local wealth. (FN35)
Origins of Old Model
In 1964, the Minister of Education implemented the Ontario Foundation Tax Plan which basedthe cost of education on a model school program. These costs were estimated from actual costs insample boards across Ontario. The province set a mill rate that had to be levied by all boards andthen provided grants to bring all boards up to the foundation level or "grant ceiling." (the average per pupil cost.)Every year a basic per pupil amount would be declared as well as a standard mill rate necessaryto raise the recognised ordinary expenditure per pupil or R.O.E. of a board
from local residentialand commercial property assessments. Boards could increase this mill rate to raise additionalfunds. The municipalities collected the taxes on behalf of the boards. School boards in wealthyassessment communities could raise more money per mill than poorer assessed municipalities.Therefore the local revenue generated did not supply the funds necessary to support the ceilingamount of a great many students, especially in rural communities.To remedy this disparity, the Province provided a basic per pupil grant that would close any gaps between the amount raised locally by the provincial mill rate and the expenditure ceiling.Responding to local community pressure, boards who wanted to spend over the ceiling couldorder additional funds for educational programs and services by directing the municipality toraise the mill rate.Boards with strong commercial and industrial assessment bases were able to generate moremoney with fewer mills. Some boards spending went well beyond the ceiling without having totax a higher rate at all, while other boards' local tax base wouldn't even support the expenditure
ceiling.The Ottawa Board of Education had almost twice the provincial average of per pupil propertyassessment wealth, while Metro Toronto had more than twice the provincial average.The Ministry also provided additional grant allocations to take into account such board specificfactors as sparsity of population, distance from an urban centre, the need to maintain smallschools, and provide for programs such as Special Education, French as a Second Language andInternational Languages.By allowing boards to spend funds beyond the grant ceiling, as long as the money was raisedfrom local taxes, the government acknowledged local needs; at the same time, however, this builtin a continuing source of spending inequity across boards.
The Historical Process of School Board Budgets
1. Assess potential revenues from property taxes.2. Establish program priorities. (80% of school board spending is in salaries)3. Guesstimate probable GLG revenue from province.4. Set budget and determine allocations.5. Send tax requisition to municipal city hall. (board adjusted mill rate)6. Hope that guesstimate was reasonably accurate.7. Hope tax payers are willing to pay and to reelect.
Regulations Made Under the Act
School boards assessments do not usually compare net expenditures, but rather use expenditures based on "cost of operating." This cost is the amount a board would charge in tuition fees for students who do not reside within its boundaries but whom the board is educating. (FN30)Elementary and secondary education funding has always been governed by General LegislativeGrant Regulations (GLG Regs.). Today as in the past, these regulations authorized the Minister to distribute funds to school boards and set conditions for distribution.
Funding for 1995
Each year the province would establish a dollar amount per pupil which represented the cost of  providing a base level of education for a student. This amount was reviewed each year to reflectchanges in costs.In 1995, for elementary this amount was $3,795 per pupil and $4,803 per pupil for secondary.Added to this amount was support for special education programs, and pooling amounts.In 1995, the special education amount was $293 per elementary pupil and $217 per secondary pupil.

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