Page 7 of 8

 

 

 


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

 

Town-by-Town
Spreadsheet


 

Perspectives
Index

About 
Perspectives

Perspectives
on Education 
Issues

When School 
Expenses Rise, 
by Allen Larson

Readers' Reactions

Perspectives 
on Housing 
Issues

 


 

 

 

 

 

 

 

 

 

 

 

 

 

METHODOLOGY AND FORMULA
FOR COMPUTING THE
MEDIAN INCOME OPTION

 

Median Income Option Methodology

  • As a starting point, the Median Income Option taps into the consensus in most Chapter 70 proposals that a community with wealth indicators at the state average has the ability to pay 75 percent of its school costs, with the state paying the balance in Chapter 70 funds.

  • As a town’s median income increases above the state average, it receives less in Chapter 70 funds, and vice versa. The Median Income Option uses the average median income per capita measured over the most recent 3 years that data are available.

  • The primary building block of the Median Income Option is the current foundation budget. This will, in effect, build components into the Median Income Option to reflect enrollment growth. As a school’s population grows or declines, so does its Chapter 70 funding. This element was borrowed from former Governor Jane Swift’s proposed “target share” formula.

  • The median income for regional school districts is not tracked by the Department of Revenue. Therefore, the median income percentages used in the Median Income Option are averages of all the towns in a particular school district

 

Median Income Formula

Barnstable

A.   Foundation budget  =  $46,661,440
B.  Town share of foundation budget  =  75 percent   =  $34,996,080
C.  Multiply B times 87 percent median income =  $30,446,590
D.  Subtract C from A  =  
Chapter 70  
=  $16,214,850
E.  Percent of foundation budget  =  34.7 percent

 

Barnstable chooses median income formula:  

  $6,105,388 – with FY04 final Chapter 70
 (13.08 percent of foundation budget)

 

Attleboro

A.   Foundation budget  $47,181,549
B.   Town share of foundation budget = 75 percent  $35,386,162
C.   Multiply B times 87.80 percent median income $31,069,050
D.   Subtract C from A =  
Chapter 70 
$16,112,499
E.   Percent of foundation budget 34.2 percent

 

Attleboro chooses property tax formula:  

$26,034,470 – with FY04 final Chapter 70 
(55.2 percent of foundation budget)

 

previous page (page 6)         

next page (page 8)