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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
When School
Expenses Rise,
by Allen Larson
Perspectives
on Housing
Issues
3. FY02 stalemate: Towns received the higher of two options, which was a compromise plan of the three branches:
- This formula was used in FY02; it was temporary.
- The state failed to statutorily renew the formula after 7 years.
- The House proposed a new formula, but no agreement was reached with Governor or Senate.
- Compromise: The districts took the higher Chapter 70 number of the Governor or the House; or if the Senate was higher than both, the average of the House and Senate figures.
4. FY03 target share: Towns were to receive a percentage of the foundation budget, an adjustment to the formula introduced by former Governor Jane Swift:
- This formula was never used.
- The bill failed in the Legislature and was dropped by Governor Romney.
- The idea was to keep the original formula intact with the introduction of a target share percentage, which was in essence a second, parallel formula, to be reached over an indeterminate number of years.
- The target share was to be a new component in the existing formula, to be a factor that could be considered without changing the entire formula.
- This plan would maintain the formula based on property values, but it would use an adjusted EQV per pupil to measure a community's wealth and determine its target share. A community below the state AEQV per pupil average would see an increase in Chapter 70 funding; a community above the state AEQV would see a decrease in it.
- The target share would kick in only when the economy improved.
5. FY04 circuit breaker: This proposal would be a simplification of the current formula; it was introduced by Governor Romney:
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This formula was never used.
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The bill failed in the Legislature.
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The proposed changes to the formula were to be permanent.
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It relies even more heavily on property values than have past formulas.
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Because of this heavy reliance, includes a “circuit breaker,” which decrees that no town shall pay more than 88 percent of its foundation budget and, conversely, receive no less than 12 percent of its foundation budget in state aid.
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The circuit breaker is a response to towns like Barnstable, which, according to Governor Romney's formula, can afford to pay $49 million for its schools yet has a foundation budget of $48 million. Therefore, according to his formula, Barnstable can afford to foot the entire bill for its schools with $1 million to spare.
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By instituting a circuit breaker, Governor Romney acknowledges his formula’s failure and thus introduces, in essence, two formulas.