Rising tuition saving… pardon! Costs 2 billion per year to the Québec government

Actual cost of rising tuition.

 

The government claims to have to raise tuition fees for economy. What is actually?

 

Let's see what happened after the rise in tuition fees in PLQ 1990-1995.

 

Tuition fees are spent 547 to 1 668 $, differential 1 121 $ per annum.¹

 

The number of full-time students and part-time peaked equivalent to 171 894 full-time staff in 1992-1993²

 

1 121 $ X 171 894 person = 192 693 174 $/an

 

Students have the pay nearly 200 million per year to study at the university.

The government therefore "saved", outwardly, 200 million per year.

 

But in fact it is quite different.

 

I would have liked a tax gives us the actual savings taking into account all other conditions, tax deductions, etc. but I've never seen anything like.

 

So without tax, all trying to see what are the real savings.

 

1- Rising tuition allows parents and workers to deduct from their taxes tuition. I repeat, I'm not a tax, but we can agree that as a result of rising tuition people were able to reduce their taxes. Let average, being conservative, d'un minimum de 10% Tuition. We thus arrive at approximately 20 million tax reduction. So we see that the government saved under 200 million or approximately 180 million.

 

2- Following the increase in tuition 1990-1995 the average age of graduation increased 1 an. The income tax and government tax is reduced 1 year by university graduate.³

There was 32 000 baccalaureate graduates 2005. Is not tax, I can briefly as assessing the government loses thousands of dollars each year ending due to the delay of graduation 1 an, say about 4 000 $ par an au provincial.

32 000 X graduates 4 000 $ = 128 000 000 $/an.

 

Unbelievable but true! Only in provincial taxes the government would lose more than half, that it saves!⁴

 

And he would lose as much in sales taxes!

 

But it is not finished!

 

3- Rising tuition 1990-1995 resulted in an increase in the unemployment rate in Quebec. If we do that attributed 1% increase in the unemployment rate over 50% of the population 7,22 million active. We arrive at more 35 000 workers who pay little or no taxes during their period of unemployment. Quebec each paying on average a few thousand dollars per year in taxes, we understand that the government is still losing tens of millions of dollars in taxes for years.

35 000 unemployed over X 1 000 $ less taxes = 35 000 000 $ in taxes and millions in sales taxes.

If they suffer a reduction in revenues of 30% being on unemployment with an average income of only 35 000 $ per annum. They suffer a drop in revenue of 10 000 $ per annum.

35 000 unemployed X 10 000 $ X 9,5% QST = 33 QST million lost each year.

 

4- Following the increase in tuition fees the number of graduation, formerly up, decreased to an average of 7 000 people per year. This means that as of today there is now 100 000 graduates paying on average about 4 000 $ year less in taxes than if they had graduated to university. And academics working as an average 40 years is 140 000 University of months it will have been, on average, following the rise of 1990-1995 tuition.

 

140 000 x 4 000 $ = 560 000 000 $/year loss of provincial tax.

If losses are similar to the QST tax losses, it is another 500 million $ /year revenues lost.

 

5- Difficult to assess the loss of revenues from corporate taxes by the government. But we guess with fewer graduates, this results in a decrease in the number of established businesses, created and funded by and for graduates.

But one can imagine, once again, several million, see tens of millions of dollars in revenues from corporate taxes are lost each year even if the tax rate is low, firms.

 

6- Following the increase in tuition 1995 the government had to raise loans and non-repayable grants. Again many millions more spent by the government. The average grant in 1991-1992 increased from 3 549 $ to 3 904 $ in 1995-1996, up 355 $.⁵

 

67 427 people X 355 $ = 24 million / year in additional scholarships.

 

7- And the number of beneficiaries to be increased 67 427 in 1991-1992 to 71 759 in 1995-1996 up 4 332 persons while the number of students decreased!

 

4 332 people X 3 904 $ = 16,9 million in additional scholarships.

 

8- Interest on loans : The average loan was 2 925 $ in 1991-1992 and rose to 3 567 $ in 1995-1996. The government has had to borrow more. Which cost more in interest. Unfortunately the figures are incomplete but CREPUQ interest on loans are past 99,2 million $ in 1193-1994 to 114,1 million $ in 1995-1996 up 13,9 million $. But the loans being increased from 2 925 $ in 1991-1992 to 3 567 $ in 1995-1996, in rise de 22%. Interest should be approximately 88 million $ in 1991-1992 an increase of 1991-92 to 1996 nearly 25 million $ per annum.

Following up 59 073 loan recipients in 1991-1992 to 62 789 in 1995-1996 in rise de 3 716.

 

Besides the ex-students who paid, on average, 840,2 million $ interests in 1993-1994 paid more than 2 billion $ per year in the year 2000. A difference of more than 1,25 billion $ per annum.

 

9- If I understand the figures CREPUQ loans guaranteed by the government and the province had to repay (for default payments I presume) increased from 190,4 million 1993-1994 to 1,09 billion per year 2003-2004. A difference of :

 

1,09 billion - 190,4 million = 897,1 million per year!

 

10- And a tax could we find many other sources of additional costs. Non-graduates may be more expensive health care (poverty, malnutrition, etc.) and social service (welfare, depression, etc) not to mention the loss of extra income in case of suicide, etc. Because a patient, or suicide, does not pay taxes and duties!

 

SOAK FOR OTHER GOVERNMENTS

 

Do not forget that we are talking of provincial government revenues but the same consequences occur federal and municipal:

 

x- Rising unemployment, therefore the cost of the federal Employment Insurance.⁶

and- reducing tax revenues and federal taxes.

of- Reduction in municipal taxes since less academic creates a downward pressure on the type of housing built, therefore their value, and the price index and the construction.

 

And that Quebecers say they are taxed too!

 

And it will continue to be as the number of university graduates, So taxpayers, will of 140 000 less, on 40 years, that they would have been without raising tuition 1990-1995.

As 140 000 people who did not graduate from university will not reimburse fees and taxes in their non-university completed, but in some cases their college, secondary and primary view and… their care!

 

IN SUMMARY : Rising tuition 1990-1995 resulted in the following changes in revenues :

 

1- STUDENTS :

Students pay each year:

–192 million $ more in tuition fee and

-1,25 billion $ in interest

A total of -1,45 billion per year.

 

2- THE GOVERNMENT OF QUEBEC

 

REVENUES

+192 million $ in tuition fees

 

ADDITIONAL EXPENSES

-20 million in tax cuts

-128 million in tax losses of non-graduates

-125 million in sales taxes for non-graduates

-35 million in tax losses for the unemployed

-33 million loss QST unemployed

-560 million in taxes due to lower graduation

-500 QST million due to lower graduation

-10 million or more in business taxes

-24 million in fee increases scholarships

-17 million increase in the number of recipients of scholarships

-25 million in loans on interest

-897 million in loan repayments

 

Total expenditure : -2,249 billion in additional spending

 

GRAND TOTAL (revenues - expenses) = -2,1 billion in spending more

 

3- BANKS

Banks receive annual interest :

The governments : +25 million

Students : +1,25 billion

Total : +1,275 milliards $/an

 

The only winners are the banks. At least we must say bankers politicians friends!

 

Rising tuition 1990-1995 therefore allows the provincial government to save… pardon, cost to the government 2 billion per year!

And more 1 Students billion to a total of 3,5 billion per year.

 

 

What good managers we?

 

And the PLQ and want to furnish it with CAQ up even greater!

 

Which would lose another 2 billion per year to the provincial government for a total of more than 4 billion per year in revenues.

 

The total loss of revenue to the federal and municipal could be of the same order. This means a loss, currently, of 4 to 5 billion in revenues per year for the various levels of government or 8 to 10 billion after another increase.

 

About 75 billion in lost 17 years since the rise in tuition fees 1990-1995.

 

While, we remember, students paid 547 $ per annum, whether

 

547 $ X 171 894 people = 94 $ million / year for their studies.

 

Any proportionately, government, would have been a good manager, would have made the free university hoped to increase its income from 1 billion per year instead of reducing its income from 2 billion per year in provincial, a difference of 3 billion per year and the same thing to other levels of governments.

 

Is a 5 to 6 billion $ per year over the government budget.

 

What solved the problem of financing… health care!

 

 

Yves Marineau

Sociologist

 

Source :

http://www.crepuq.qc.ca/IMG/pdf/indicateurs-2.pdf

http://www.stat.gouv.qc.ca/donstat/societe/demographie/pyramide_age.htm

 

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