The provincial government is assuming direct control over how much property owners pay on the education portion of their tax bills, as a consequence of Saskatchewan's revamping the school tax system.

The change, announced in Wednesday's budget, ends a system that has been in place since 1905, the year Saskatchewan became a province.

For 104 years, school board trustees have set mill rates to pay for part of the costs of running schools.

Instead, starting in 2009-2010, property tax rates for education will be set by provincial politicians in Regina.

"It's such a mammoth change," said Roy Challis, president of the Saskatchewan School Boards Association. "I think some boards will not think it's a good thing."

Those provincewide mill rates will apply to all property owners with only three variations: residential, commercial and agriculture.

Catholic school boards would be allowed to levy different tax rates, if they want. However, the government said that if the rates are higher than the provincial rates, grants would be reduced to "ensure that school division equity is maintained."

Calling the status quo a "long-standing irritant," the provincial budget papers outlined how property tax owners had been shouldering an ever-increasing burden when it came to funding Saskatchewan's pre-Kindergarten to Grade 12 schools.

There has been a disproportionate amount of money that has been paid by property owners to fund education in Saskatchewan," Education Minister Ken Krawetz told CBC News on Wednesday. "That needed to be resolved."

Krawetz said the new system strikers the proper balance.

The shift will be achieved by cutting education property tax rates for 2009 and injecting more provincial dollars into the education system.

The province estimates that, overall, property taxpayers will see a 14-per-cent reduction in 2009. In that same year, the Education Ministry will pump an additional $241 million for its portion of education spending.

The budget papers caution that individual tax bills will be affected by property values, meaning that a "small percent of property owners will not see a decrease."

"Reducing our reliance on education property tax has been a top priority for many of our business stakeholders and municipal partners," the budget documents said. "Recent consultations with [those stakeholders] determined the necessity to act upon this long standing issue."

Krawetz said Saskatchewan was following the lead of other jurisdictions, with the change.

"We are the eighth province to join in with seven others already that have a very similar model to what we have today," the minister pointed out.

He also pointed out that the change will give the province more authority to direct how education dollars are spent.

"When you, as a government are setting the principles, setting the priorities, setting everything else, but you don't have control of the purse strings, then it becomes a little difficult," he said.

Resistance possible

While the province heralded the changes as a historic tax cut, there were hints that the new tax regime could meet with resistance from local school boards.

In an attached report, which outlined options to resolve the education tax issue, Jim Reiter, a member of the legislative assembly assigned to research the matter, said school boards may react negatively to the changes.

Krawetz said he has promised school boards that the province will ensure "adequate funding" for education into the future, and added that the provincial share could rise beyond 66 per cent.

The change in taxing power will not change how property taxes are collected. The current system, where municipalities deliver tax bills and do the collection work, will continue.