Excludes the adjusted gross incomes of the upper and lower 1/2 of 1% of taxpayers in a school district from the calculation of the adjusted gross income of such district for the purposes of the alternative pupil wealth ratio and the combined wealth ratio relating to the provision of state aid to school districts.
TITLE OF BILL: An act to amend the education law, in relation to school district adjusted gross income for purposes of determining the alternative pupil wealth ratio and combined wealth ratio
PURPOSE: Excludes the adjusted gross income of the upper and lower 1/2% of taxpayers in a school district from the calculation of the adjusted gross income of such district.
SUMMARY OF PROVISIONS: The calculation of the adjusted gross income of a school district shall not include the adjusted gross income of the one-half of one percent of the taxpayers in such a school district who have the greatest adjusted gross incomes and shall not include the adjusted gross income of the one-half percent of the taxpayers in such school district who have the lowest adjusted gross income.
JUSTIFICATION: The State Aid formula was established to help provide an objective method to fairly allocate our State's limited education dollars. It attempts to identify, in a fair manner, each district's ability to fund education by measuring wealth. To help assure that goal, the formula has been modified numerous times since its inception.
Unfortunately, due to an existing quirk in the formula, districts with h one or more atypical high earning individuals can find their average income radically skewed. Their higher perceived wealth leads to lower State aid and the unfair result of higher property taxes for everyone in the district. This is not in keeping with the intent of the formula.
In a district not currently affected by this quirk, if a single very wealthy individual moved into the district or even if a resident won a lottery jackpot, State aid to the district could be drastically reduced, unfairly raising, the property taxes of the typical resident. This is neither logical nor fair.
By basing school aid formulas on total wealth in given districts without understanding the income distribution within these districts current state aid formulas penalize the majority of residents in so-called high wealth districts. This legislation seeks to remedy this inequity by removing the Adjusted Gross Income (AGI) of both the top and bottom one-half of one percent of taxpayers in a school district. By removing these statistical outliers from a school district's wealth equations, a more accurate wealth picture is presented for the purposes of calculating state school aid.
LEGISLATIVE HISTORY: 2011-12 S.3800; 2009-10 S.2728/A.3275.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 1552 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. LAVALLE -- read twice and ordered printed, and when printed to be committed to the Committee on Education AN ACT to amend the education law, in relation to school district adjusted gross income for purposes of determining the alternative pupil wealth ratio and combined wealth ratio THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subparagraph 1 of paragraph b of subdivision 3 of section 3602 of the education law, as amended by section 13 of part B of chapter 57 of the laws of 2008, is amended to read as follows: (1) "Alternate pupil wealth ratio" shall mean the number computed to three decimals without rounding obtained when the adjusted gross income of a school district for the calendar year two years prior to the calen- dar year in which the base year began divided by the total wealth pupil units of such district is divided by the statewide adjusted gross income per total wealth pupil unit. Such statewide average gross income per pupil shall be established each year by the commissioner and shall be transmitted to school districts. Such statewide average shall be rounded to the nearest hundredth and shall include the adjusted gross income and total wealth pupil units of all school districts eligible for aid pursu- ant to this section except central high school districts. For the purposes of calculating such statewide average the data for the city school district of the city of New York shall be citywide data. THE CALCULATION OF THE ADJUSTED GROSS INCOME OF A SCHOOL DISTRICT SHALL NOT INCLUDE THE ADJUSTED GROSS INCOME OF THE ONE-HALF OF ONE PERCENT OF THE TAXPAYERS IN SUCH SCHOOL DISTRICT WHO HAVE THE GREATEST ADJUSTED GROSS INCOMES, AND SHALL NOT INCLUDE THE ADJUSTED GROSS INCOME OF THE ONE-HALF OF ONE PERCENT OF THE TAXPAYERS IN SUCH SCHOOL DISTRICT WHO HAVE THE LOWEST ADJUSTED GROSS INCOMES. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06174-01-3