The City of Johannesburg will only charge schools a 5% increase in rates, in line with inflation, backdated from July, after an outcry about rates that increased tenfold.
The decision to increase the rates tenfold led to multiple court cases and threats that independent schools in poorer areas would have to close.
The city says it was forced by the department of co-operative governance & traditional affairs in 2021 to reclassify schools as businesses, even after it resisted the instruction.
Tertiary institutions and state schools, in which many parents still pay high fees to cover maintenance and municipal costs were also reclassified by the city under instruction by the department, with their rates rising sixfold from July.
One private school faced a July rates bill, excluding water and power, of R365,318, according to Anne Baker, spokesperson for the National Alliance of Independent Schools Associations (Naisa) who had been attempting to meet city officials.
The bill of a Soweto school rose from an average R7,000 to just under R64,000 in July. She said most private schools were not wealthy and may have had to shut. Baker welcomed the decision to revert to the old billing schedule.
Johannesburg mayor Mpho Phalatse told the media on Monday morning that in 2014 an amendment to the Municipal Property Rates Act was signed into law by the president reclassifying schools, and cities had seven years to implement it.
Phalatse told a media briefing that in August 2021, when they had still not implemented the rates change, the city received a notice of noncompliance from the department.
It has been engaging with the department and “pleading with them to allow us to allow the status quo to remain and not change the education category. However, in spite of all those attempts, the department did not accede to the requests by the city.”
The city provided more information to the department in March but were told to make the change to schools’ rate classification.
In the past month, the City of Johannesburg said it had been dealing with queries, complaints and court cases about the increased rates, which amounted to an extra R27m a month.
Civil rights group AfriForum and JSE-listed education group AdvTech sought a court injunction against the metro in the high court in Johannesburg. The court has since ordered that no credit control measures may be taken against any education institution that fails to pay the hugely increased rates bills, and the case was postponed until October.
JSE-listed education provider Curro said last week it was going to court on the issue, having paid business rates from 2020.
Phalatse said the city complied with the reclassification order “because we do not want to find ourselves on the wrong side of the law or audit queries by the auditor-general”.
She said the department’s decision to reclassify schools had many consequences, and admitted that it could force certain independent schools to close their doors.
What the city has decided to do instead is to change the classification to business, but still charge schools under their previous billing schemes with the 5% increase.
This solution is for the current financial year, while it hopes to find a longer-term solution with the department, it said.
Baker asked why schools were not classified under the new legislation as public benefit organisations that would also be used for NGOs or libraries.
Department spokesperson Lungi Mtshali said he was investigating whether a department official had indeed told the city to increase its rates and charge schools as if they were businesses.
Mtshali said in terms of the amended act, the category education had fallen away and all municipalities had to reclassify for-profit schools as businesses for reporting and statistical purposes. But he said the city was empowered to charge the schools the same amount as previously charged. “Cogta [department] is not instructing them to increase rates.”
Completely non-profit schools could be recorded as public benefit organisations, he said.
Some municipalities have not yet changed classification as schools to businesses, the city said. It is hoping to settle out of court with the various groups that have instituted legal action.
“The City of Johannesburg’s legal department has requested a meeting with the legal counsel of the parties who have brought action against the city to put the proposal on the table,” it said in a statement.
With TimesLIVE
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