What's happening
This bill amends the education law to exclude the top and bottom 0.5% of taxpayers' incomes when calculating school district wealth ratios.
Why it matters
Excluding the top and bottom 0.5% of incomes when calculating school district wealth could make state aid formulas more representative of the “typical” taxpayer, potentially reducing the impact of outliers (very wealthy or very poor residents) on funding decisions.
This change could especially affect districts with a small number of extremely high-income households, making them appear less wealthy for state funding purposes and possibly increasing their eligibility for aid.
By also removing the lowest 0.5% of incomes, the formula avoids artificially lowering a district’s wealth measure due to a handful of very low-income households, which could make funding allocations more equitable.
The bill could shift state education funding, benefiting some districts (especially those with significant income inequality) while reducing aid to others, thereby influencing local tax rates, school budgets, and educational opportunities.
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Who cares
School district administrators and budget officials
The bill would change the income calculation used to determine their district’s alternate pupil wealth ratio by excluding the highest- and lowest-income half-percent of taxpayers.
State education officials
They would need to apply the exclusions when calculating district income for the wealth ratio and establishing the statewide income-per-pupil average.
Taxpayers at the top and bottom of district incomes
Their adjusted gross incomes would no longer count toward the district income calculation used in the alternate pupil wealth ratio.
Headline styles
Remove Outliers From Income Calculations
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to education
- Referred to education
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Exclude Outliers from School Income
In Assembly Committee · Education · Sponsor Steven Englebright
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
S. 4471 A. 5756
2017-2018 Regular Sessions
SENATE - ASSEMBLY
February 15, 2017
IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered printed, and when printed to be committed to the Committee on Education
IN ASSEMBLY -- Introduced by M. of A. ENGLEBRIGHT -- read once and referred 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 Assembly, 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 calendar 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 pursuant 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.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03533-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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 or general idea of bill
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 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.
Prior legislative history
2009-10 A3275; S2728 2011-12 A3275; S3800 2013-14 A3657; S1552 2015-16 A3037 referred to education; S2107 referred to education
Fiscal implications for state and local governments
None to the State.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.