School district preparing for increased medical taxes

No word yet if government will assist with cost climb with MSP replacement

The Coast Mountains School District is looking at an ongoing medical tax increase of close to $214,000 with the new Employee Health Tax system replacing Medical Services Plan premiums.

During the 2019-20 school year, with the EMT tax in place and MSP not yet fully eliminated, it is expected that health taxes will jump to $337,000.

The B.C. Liberals are calling this a “double tax”, but the increased costs are offset by savings in the 2017-18 school year.

“Yeah, the savings of the 50 per cent reduction of MSP sort of offset the Employee Health Tax in year one and year two,” acknowledged school district secretary-treasurer Alanna Cameron.

Overall, the tax climb averages out to a mid-way increase over the course of three years, and the reason for the so-called double tax in 2019 is timing: the tax changes occur in January but the school district’s fiscal year runs from July 1 to June 30.

“We’re the only provincial government body that has a year-end different than March 31,” explained Cameron. “Our year spans a different window of time.”

But long term, the taxation change will mean an ongoing increase in health tax for school districts, she said.

READ MORE: School district adding up cost of new health tax

MSP is being phased out gradually, beginning this year.

For 2018 the district will save close to $124,000, next year roughly $248,000, and the following years $371,000 and $495,000 respectively.

The Employee Health Tax (EMT) will be rolled out halfway through the 2018-19 school year, costing $354,500, and then the full $709,000 every year following.

Overall, the taxation change will cost $320,000 in total during the transition years, an average of $107,000 each year. Once the transition is complete, the school district will have an ongoing tax increase of close to $214,000.

READ MORE: Chilliwack school district has nearly $1 million bill for 2019 in new health tax

READ MORE: Langley school district seeks clarity on new health care payroll tax

Cameron says the school district doesn’t know yet whether those costs will be covered by the government, but it is optimistically expecting it will.

“We have not received notification of additional compensation to cover this additional cost,” she said, adding that the province is announcing its school funding this week.

“On March 15 we will be advised as to what our grant allocation is for next year,” said Cameron, “and within that, we will certainly be able to determine whether this additional cost is funded or not.

“I think our board remains optimistic that government will recognize this as an added pressure and will fund it accordingly,” she said.

The EMT tax, like MSP, pays for medical coverage for the teachers, principals and support staff within the school district.

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Chart shows the medical tax changes over the course of the next four years. (Contributed image)

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