The days of ratepayers supporting the city's schools are ending with the city council telling central government it is time it paid its own way, says Tauranga Mayor Stuart Crosby.

'With regard to the review of local government funding, it's very clear the state - the government of the day – should start paying more instead of freeloading, and it is freeloading off the ratepayers.

Tauranga schools are going to lose a rates remission.

'So this is a signal to the government of the day and I don't care who it is – start paying your way. Stop getting free rates from everything; hospitals, schools, crown reserves, and start paying your way or give us more funding.”

The council decision to ends a 47 per cent subsidy on all schools sewerage rates. Its graduated removal was going to be part of the 10 year plan discussions, but it was put on hold until after the council consulted with the stakeholders, no one of whom are in favour of the rates rise.

Three of the schools consulted warn the Ministry of Education will not pay its rates.

The decision means starting from next year all schools will have a 50 per cent subsidy on their waste water rate dropping by 10 per cent until the 2021/22 financial year when they will be paying the full rate.

Because of the arcane nature of the previous discount system, adopting the 50 cent discount actually drops the council's wastewater rates return from schools next year from $246,810 to $231,990, but by the 2021/22 financial year it is calculated to be $463,980.

Councillor John Robson says there's nothing in the feedback from the schools leading him to believe the gradual removal of the subsidy is unfair or unreasonable.

Councillor Steve Morris's was the only dissenting vote.

He says it's dogmatic to say the government should be paying waste water rates on state schools. 'The fact is they don't, and it is our community, and we have to suffer from the effects of funding or under funding of schools,” says Steve.

Merivale School says it may have to make cuts to pay the rates, as does Otumoetai College. Tauranga Primary says costs will have to be recovered from spending on teacher aides and books, says Steve.

The children, most of whom are not likely to own their own homes, aren't going to benefit from the decision says Steve. It will be the ratepayers.

'The fact is there is no increase in revenue for doing this, it is just simply punishing schools, punishing kids, sending the wrong message. You can argue the government should do it. The fact is they don't, so why punish the kids.”

Schools rates remissions date from an amendment to the Rating Powers Act in 1988 which required councils to provide a remission to schools, using a complex formula involving the relationship between number of toilets and staff/pupils. Under this "Donnelly Formula" Council staff receives information on 32 schools from the Ministry Of Education and calculates the individual remissions. The average remission given to schools in Tauranga is 47 per cent.

As part of the 2015 Long Term Plan councillors agreed to the change to a standard 50 per cent, to be phased out over five years. After the long term plan consultation process staff noticed there were no submissions from schools, so the council delayed acting on it until the 2016 financial year and after consulting with schools.

Otumoetai College says the idea of the Ministry of Education paying is laughable. The Ministry of education submits school toilets are unused for 175 days, and schools use less water than other types of properties.