Abbotsford school district ‘not panicked’ by added cost of new health tax

Both MSP premiums and new payroll tax will be in effect in 2019

A new payroll tax supplanting Medical Services Plan premiums will cost the Abbotsford school district an extra $800,000 during the 2019/2020 school year. But in the big picture, it will amount to relatively minor adjustments for an institution with a $220 million annual budget.

That’s according to the district’s secretary treasurer Ray Velestuk, who said he’s “not panicked” by the coming employer health tax announced last month in the new NDP budget.

READ: School districts adding up cost of new health tax

The phase out of MSP charges – which were cut in half this year and will stop entirely on Jan. 1 2020 – will first save the district roughly $650,000 this year, Velestuk said. The transition between health funding revenue sources will be a “wash” for the 2018/2019 school year, he said, adding about $90,000 to the budget.

The 2019/2020 budget will be the most negatively affected, Velestuk said, with the double dip in district coffers costing about $800,000. After MSP premiums are eliminated entirely, the 1.95 per cent tax on the payroll will cost the district $250,000 to $300,000 more each year, he said.

But, Velestuk said, that projection is based on the current education funding model, which is likely to change. The ministry of education is currently reviewing how it funds schools and new policies are expected to be in place in time for the 2019/2020 school year.

Velestuk also said the coming increase in B.C.’s carbon tax on April 1 will be absorbed by green initiatives already underway at Abbotsford schools, including using electric vehicles and reducing paper consumption.


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