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
TownbyTown
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)
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