Schools in Joburg’s rates crosshairs again

The City of Joburg is trying to take another bite of the rates apple with regard to property used for education purposes – proposing policy changes that will result in a debilitating increase in their rates bills from 1 July.

This comes despite a court order obtained by listed education groups Curro Holdings and AdvTech as well as the Independent Institute for Education and AfriForum that limits the increase to 4.85% for the current financial year as well as the next, which starts on 1 July.

The city’s proposal, contained in its draft rates policy, will be tabled for approval around mid-June, but stakeholders can still object before the 29 May deadline, says Julie Suddaby, DA councillor and former Member of the Mayoral Committee (MMC) for finance.

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Steep increase

AfriForum says if the proposal is approved, a school currently valued at R100 million and paying R18 900 per month for property rates will see an increase to R113 400 per month for public schools – and R190 000 for independent schools.

It will apply to all property used for educational purposes, from a nursery school to tertiary institutions.

Moneyweb previously reported that the city scrapped the special category for property used for educational purposes in its rates policy for the current year.

Importantly, in terms of the special category, the tariff for educational properties was a quarter of that for residential property.

Without it, and according to the revised policy, public schools would have been taxed as ‘public service’ property and independent schools would have been taxed as businesses, and be subjected to dramatically higher tariffs.

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That matter was fought

When the matter went to court, the DA administration that was in power at the time and blamed the National Department of Cooperative Governance and Traditional Affairs. It argued that a change in legislation left it with no option but to scrap the special category for education.

AdvTech said the city misunderstood the legislation, and was vindicated by the court ruling in February. Apart from capping the increase, it also clarified that the city may retain the education category.

Then-DA mayor Dr Mpho Phalatse later agreed to limit the increase for the current financial year, but the applicants persisted with the application.

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The ruling was based on, among other things, the failure of the city to give stakeholders an opportunity to object to the changes.

And it seems the city – currently ruled by a coalition of the ANC, EFF and other parties, with Al Jama-ah’s Kabelo Gwamanda as mayor – now wants to correct that by following the correct procedure.

It may however run the risk of contravening the court order if it persists with a higher increase than the 4.85% the ruling ordered.

Suddaby says the DA has alerted stakeholders to the proposed policy changes and encourages them to submit objections.

She says the city is appealing the ruling.

ALSO READ: Relief as Joburg to recalculate schools’ rate

Financial management is the issue

However, Morné Mostert, head of municipal affairs at AfriForum, says its legal team has not been informed of such a step.

He says the city’s actions are of great concern.

“The Johannesburg Metro should recognise the importance of schools, preserve and promote them, instead of trying to fund itself by means of the taxation of schools.

“This behaviour is characteristic of a desperate state, which is willing to try anything to obtain funds due to the fact that their financial management leaves much to be desired.”

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.