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Median
Income
Option Introduction
Rationale
for
Establishing
the Median
Income Option
Methodology
and
Formula
for
Computing the
Median
Income
Option
Analysis
of Widely
Held Assumptions
about Nonresident
Taxpayers
Perspectives
Index
Perspectives
on Education
Issues
A
Proposal for
Fair and Equitable
Distribution
of State
Education Aid
When School
Expenses Rise,
by Allen Larson
Perspectives
on Housing
Issues
A
Proposal for Fair and Equitable Distribution
of State Education Aid, Giving Equal Weight to the
Two Main Indicators of Ability to Pay:
Property Values and Median Income
Representative
Demetrius J. Atsalis
2nd
Barnstable District
October 2003
INTRODUCTION
If there is one thing that has become perfectly clear over the past 10 years about the state’s property values–based Chapter 70 formula, it is this:
One size does not fit all.
There are two main measures of a community’s wealth or “ability to pay” for local education: income and property. As such, these measures should be given equal weight in calculating any state aid distribution formula. A formula based on only one measure of wealth will never produce a fair and accurate gauge of every community’s ability to pay. There are unique regional demographics and economic factors in the Commonwealth that make it impossible. The history of the Education Reform Act formula has shown this to be true. Ten years of unsuccessful tinkering, unproductive recriminations, and unending lawsuits can’t be wrong.
Indeed, if anyone tried to write one all-encompassing formula based mainly on one measure of wealth, the result would be a complicated, arcane mess that would create a “winners-and-losers” scenario pitting town against town in a Darwinian grab for precious school funds. Sound familiar? The last two governors, the Department of Education (DOE), and the Legislature have all acknowledged this failure by introducing alternative formulas that attempt to mitigate the original formula’s harmful effects.
Therefore, in acknowledging the failure of one formula to fit all, I am proposing a median income–based “option” formula that borrows methodology from the current formula as well as the alternative formulas.
The
basic idea:
A town would have the option of
receiving the higher amount between
the current
(and likely future) property values–based formula or
the median
income formula.