This study examines repercussions of the incentive nature of the Manitoba property tax credit plan in relation to local school systems' taxation practices during 1978 to 1981. Data from municipalities and province school systems were obtained from the Manitoba departments of education and municipal affairs. Investigation was carried out in five stages: theoretical determination of the net local property taxation requirement under varying values of tax credit, determination of actual property taxation requirements associated with respective value of the provincial property tax credit, determination of the net property taxation requirement by subtraction of the tax credit received by the municipality from gross or total property tax requirements, reorganization of data with school regions to determine whether increased expenditures were incurred in the form of municipal or school expenditures, and examination of increased school expenditures to determine whether increase was caused by implementation of the property tax credit. The major finding is that school systems, whose taxes were being relieved, increased their demands for funds from local taxpayers in excess, capitalizing on the situation created by the tax credit plan. This unintended effect suggests that policymakers and interest groups should more carefully consider potential effects of such plans. Two tables of data are included. (CJH)