City of Joburg faces court action over exorbitant school-rates hikes

FIFI PETERS: [Sending] your child to school in Johannesburg is about to get really expensive as from next month, when schools are expected to pay new rates to the [Joburg] municipality. Essentially the new rate, as I understand it, will see your school bill as a parent increasing by quite a lot – by around six times if your child attends a public school, and if in a private school your school fees could be around 10 times higher than the current bill.

Read: Joburg schools in for huge rates shock

But let’s get clarity from Morné Mostert, who is the head of local government at AfriForum. Morné, thanks so much for your time. As I understand, all these changes have to do with how school buildings will be classified, and [with] some changes on that front resulting in higher rate fees, as it were. Can you just give us a bit more clarity and guidance as to exactly what is happening and why these changes?

MORNÉ MOSTERT: Yes. Thank you very much. To explain it briefly, previously the City of Johannesburg Metropolitan Municipality had a category for every school or education system – so schools, colleges, universities, etc. These had a specific ‘college’ category that lowered the municipal property rates, so they didn’t pay the same amount as businesses did. Why? Because schools are focused on educating people and it’s a structure [which] must make it easier for them to excel – rather than make it more difficult for schools to excel within our public sector and private sector.

What has happened is they [the municipality] removed this category from their property rates policy. This means that they need to take the public and private schools and put them into a ‘next’ category. So the next one that they thought the most applicable is the ‘business’ one. That means that the property rates of each school would in most cases go up by about 10 times the amount.

So if you have a school, a large school with a valuation of about R70 million – this is the school grounds – the property rates would go up from R12 000 to R126 000. So it’s more than 10 times the amount.

Obviously schools can’t carry those costs on their own, so they’re going to be able to collect those costs from the parents who actually pay for that. And in certain instances the municipality is going to close down some of the [schools] within the city of Johannesburg area because of the cost creeping up to that point.

So AfriForum has written a letter to the city requesting [an explanation of] this dubious or extreme amount [by which] the costs are going up – especially since [according] to our records this change took place after the public-participation process they held, saying this is what the tariff would be. Everyone was fine with that, because everyone saw there is still going to be an education category.

Now this has been removed, and no one saw it until the time when the council actually approved that budget. That is why we have written the letter to them to explain the situation. Maybe they made a mistake – but we don’t believe so.

We think that they are purposefully trying to get a larger income by overtaxing private and public schools.

FIFI PETERS: Morné, thanks for that explanation as to what they are doing. But I still don’t understand why this reclassification of schools as businesses.

MORNÉ MOSTERT: I must say that I also don’t know why the city would make such a decision to make it harder or cripple the education system by actually levying this higher rate. But what we are thinking is [that] the city is trying to increase its revenue collection, and one means of doing that is to change the categories. While we think that the school is a structure that has a positive effect on communities and has a purpose to uplift people, it should not be taxed in the same way as a business is taxed, or like a mine is taxed, because the purpose of that structure is different.

That’s why we are standing up and working together with some of the schools within the district to ensure that this does not happen, and we can try and assist and actually bringing the reality of the effect of this decision to the city’s management.

Within a letter to them [from] our attorneys, [we have requested]a response by tomorrow, June 30, 2022] to give us all the relevant information as requested. But if we are not happy with the answer that they give us, sadly this matter will go over into litigation.

FIFI PETERS: So you are waiting for a response to your letter as soon as tomorrow? When exactly did you write the letter to them?

MORNÉ MOSTERT: We delivered the letter on Friday and our original [request for a response] was by Thursday, but because Johannesburg is a large municipality, they requested an additional few days to give proper feedback to us. But once again, we are still preparing our court papers in the event that we do not receive enough information or enough explanation on why and how the city of Joburg justifies a 10 times increase to public and private schools.

FIFI PETERS: I understand that private-school group Curro is also set to pursue legal action, and I’m wondering if you are working together in any way.

MORNÉ MOSTERT: The legal action they are instituting is a bit different from ours. Our focus is now on the categorisation, but they have certain individual account disputes with the municipality as well. So I think they are also just lining that process up.

FIFI PETERS: You mentioned I think a valid point, just the fact that we do know that municipalities have been under pressure in terms of revenue collection, and for them this perhaps could be an avenue whereby they’re able to increase that collection. They’re seeing a potential source of income. It then raises the question … to say the municipal income or revenue challenge is not unique to the City of Johannesburg. It’s the story of most of our municipalities. What then is the risk that this happens elsewhere – the changes to school rates – in your view?

MORNÉ MOSTERT: Each local municipality or metro is autonomous, so they can make their own decisions on how they would like to fill their municipal budget. One would hope that usually they do their integrated development planning beforehand to have a clear idea on what collection rate they ought [to have] or the collection rate they think they’re going to have. Then you plan on that. So you can understand that the City of Johannesburg is a very large city with a large asset base to collect property rates from.

If you compare that to, let’s say, Naboomspruit or Mookgophong in Limpopo, which is a plain rural community that doesn’t have the property rates base, but there are systems in place like [the Local Government Equitable Share Grant?] individuals that cannot pay, or who are not able to pay full municipal rates, then national government will give them equitable share to be able to receive these services.

But what we are seeing is that there has [developed] a reliance on that money, and we feel that municipalities must do more to collect some of the normal revenue. Collect the revenue by selling electricity; collect the revenue by selling water to individuals within the municipal district. We want to see the collection rates up and, if you get the collection rates up you obviously need to have responsible spending on the projects to ensure that you deliver these services continuously.

FIFI PETERS: Morné, we’ll have to leave it there just in the interest of time. Hopefully we can catch up with you later on in the week. We, I think, are keenly interested in hearing the response that you get from the City of Johannesburg. I suppose that response has to come through before Friday, July 1, when these new rates are expected to kick in.

But thanks for your time this evening. Morné Mostert is the head of local government at AfriForum.