Rudman's city: Ratepayers to pay for use of school toilets

By BRIAN RUDMAN

Schools are about to receive a $30 million bonanza - and it has nothing to do with last week's Budget. The person they have to thank is New Zealand First MP Brian Donnelly.

Not that the one-time Whangarei school principal is seeking too much publicity for his feat. Indeed, he's trying to hide from the irate local councils who will have to pick up the tab.

We're talking toilet taxes here, the $40 million or so that the country's schools have to flush down the dunny each year in wastewater charges. Thanks to a private member's bill Mr Donnelly has been shepherding through Parliament since July 1999, schools are about to get an 80 per cent cut in this charge.

For some schools the savings are significant. The charges levied on Rangitoto College's 132 lavatory pans, for example, will drop from $49,168.04 to $8237.26, a saving which will no doubt pay for a lot of computer software and library books.

Mr Donnelly's Educational Establishments (Exemption from Certain Rates) Bill still has to go through its final parliamentary stages in next month. But so far it has had the backing of all parties and, all going to plan, will come into effect from July 1.

Of course the downside is that the school's windfall will come out of ratepayers' pockets.

For Auckland City's Metrowater, it will mean a drop in school wastewater income from $1.5 million to $300,000. North Shore City is looking at a loss of revenue of $862,119. However, since it is giving schools grants totalling $293,000 to soften the impact of this charge, the overall negative impact will be $569,119.

Tom Wong Kam, North Shore's revenue manager, says that ratepayers will have to pay the equivalent of $11 a lavatory pan to cover the loss of income.

Even authorities such as Manukau City, which levy only the $6.50 a pupil charge recommended by the Government, will suffer. Manukau earned $370,000 in school sewerage charges last year. Once the Donnelly bill is passed, their school's take will be down to $225,000.

The battle of the pan charges has its beginnings more than a decade ago in the Tomorrow's Schools revolution of the Labour Government. Under the new regime, schools were given a block grant based on pupil numbers and given responsibility for paying their own bills.

On the face if it, it seemed a fair enough system. Books and heating and lighting and toilet paper all cost about the same whether you lived in Warkworth or Waipa. Disposing of sewerage, however, did not.

Under the Rating Powers Act 1988, councils had been permitted a variety of ways of levying rates. They went for it with a gusto which was reflected in their wastewater charges.

At the time, Rodney-based Warkworth Primary's toilet tax was $32,400, or just over 10 per cent of its annual Government grant, while similar-sized Meadowbank Primary in Auckland City was taxed just $1400. In contrast, lucky schools in Cambridge and Te Awamutu paid nothing thanks to a local council which waived all rates to schools.

When the anomalies were brought to light, Education Minister of the day, Phil Goff, agreed that some charges were unreasonable, but refused to give schools more money, saying he did not intend "to encourage other local authorities to match Rodney." National's Lockwood Smith endorsed that line when he replaced Mr Goff.

Some schools ended up pouring concrete into toilet bowls to reduce their rates liability. Other persuaded councils to give subsidies. Most just struggled to pay.

The spread of charges was highlighted in 1999 when the Ministry of Education created a model school and asked local councils around the country how much the sewerage charges would be. Replies ranged from $120 to more than $12,000.

Mr Donnelly's original bill proposed that schools be totally exempt from sewerage charges as they are from rates. It was ministry officials who came up with the compromise of 20 per cent of whatever the councils' regular charge was. They based this on their estimate of how much use a school toilet pan got compared with a home pan.

For schools it's great news. For ratepayers it is not. Why, councils are asking, should they be left to subsidise schooling - a strictly central Government responsibility? Why indeed? But that's something for another day.