Private schools in Johannesburg are receiving whopping rates bills for July.
This is due to several factors: the new 2022/2023 Johannesburg municipal rates policy coming into effect and the scrapping of their previous classification as public benefit organisations, which means private schools are now being charged as businesses.
The new rates classification sees the removal of the “education” category from its rates policy. This has resulted in public schools being classified as “public service properties” and rated a tariff six times higher than what they were paying until the end of June, with no rebate relief afforded to them.
Private schools are now classified as businesses and charged about 10 times more, and though they may apply for a 25% rates rebate, the qualifying criteria are not clear. Many low and medium-fee schools have been reliant on the rebates they were eligible for as non-profits to keep their fees relatively affordable.
The National Alliance of Independent Schools Associations (Naisa) is trying to negotiate with the city, but cannot do so after civil rights group AfriForum and JSE-listed education group ADvTech last week sought a court injunction against the metro in the high court.
The municipality, the municipal manager and mayor, the minister of co-operative governance and traditional affairs, the minister of basic education, the MEC for education and the minister of higher education and training have been listed as respondents.
Last Tuesday the court ordered that no credit control measures may be taken against any education institution that fails to pay the hugely increased rates bill. Together, the parties and the city then reached an agreement to have the case postponed until October.
“The decision by the City of Johannesburg to evaluate schools as businesses does not take into account the majority of schools in Naisa are classified as public benefit organisations and currently benefit from rates exemptions. It was also carried out without public comment,” said Naisa’s Anne Baker, who is also deputy director of the Catholic Institute of Education.
To demonstrate how this fee increase is affecting Naisa members, Baker said an independent school in Soweto that had been paying rates of about R7,000 per month received a bill for R63,799.
“Even with a 25% discount on this amount, it is effectively an increase of R40,000. Another school in Parktown — admittedly situated on valuable designated business property — previously paid about R17,000 a month. They have been charged R127,863 for July. These increases are massive,” Baker said, describing the hike as the work of a municipality under pressure to make more money.
Another school in Bryanston pays about R160,000 a year for rates, but with the increase will have to pay more than R1m.
Alana Bailey, AfriForum’s head of cultural affairs, said the temporary relief the agreement offers is welcome.
“AfriForum hopes the case will bring permanent clarity on the matter and relief from the new excessive tariffs. If this does not happen, there is a risk that some of the institutions will have to cut back on the quality of their services and tuition or some may even have to close their doors,” she said.
ADvTech — one of the biggest players in the private education sector with 17 institutions falling within the city’s jurisdiction — and AfriForum contend that the municipality’s decision to remove the education category from the rates policy was unlawful and are asking that it be set aside.
Baker said the rates hike comes after independent schools took a heavy knock during Covid-19 when many families took their children out of school for financial reasons. It was also unfair to target small private schools “along with your ADvTechs and Curros” with a blanket policy.
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