A group of towns are members of a school district. Each town receives a certain amount of state money according to a formula that takes into account the property valuation of the town and the total amount of students in that town (among other things - but these two are the main items).
The school district then uses it’s own formula (that has been set for the previous three years) to determine the final amount of money each town submits to the district to fund the schools.
Suddenly, one town - the most affluent town - decides they don’t like this because they end up paying more on a per student basis than the other towns - approximately twice as much, due to the state’s formula (the town has VERY high property value and very few kids).
This affluent town brings an ultimatum to the Board - either place a “cap” on the per student cost - or we are withdrawing from the district. This means the less affluent towns (and some are quite a bit less affluent) would have to make up the difference due to this cap - or if the affluent town leaves, the remaining towns would all have to pay more to make up the gap from the affluent town’s money that would be leaving.
Which way would you vote - pay a portion of the affluent town’s share - or let them take their ball and go home?
Are you telling us the truth, in saying that this is hypothetical?
I don’t know of any specific cases of this happening (in particular, the bit about the affluent community giving an ultimatum like that), but it sounds highly plausible to me.
It’s well known of course that, even in areas where all schools should be getting comparable funding, the more affluent neighborhoods get much better schools, with much better funding, all the latest audio-visual educational equipment, best lab equipment, etc. – while the schools in the poor neighborhoods are run-down and trashy. I’ve certainly known of this, at least in the case of Los Angeles when I was a high-school student there. (That was many years ago.)
Is the OP’s scenario actually happening somewhere?
Unless I’m misunderstanding the hypothetical, I don’t see how this is subsidizing the rich town. Is this the right way to think about it?[ul][]Rich town: Pays $1,000 total taxes. Has 100 kids. Tax paid per kid in town: $10.[]Poor town 1: Pays $100. Has 1,000 kids. Tax paid per kid in town: 10 cents.Poor town 2: Pays $200. Has 200 kids. Tax paid per kid in town: $1.[/ul]If the Rich town says, “Look, we’re not going to pay more than $7 per student in our town,” they’d still be paying more taxes, including per kid. They’d still be subsidizing the other towns. The poor towns would be nuts to let them walk. Lots of variables missing–e.g., how much value do the towns actually get for their taxes paid? Assuming the rich town pays an amount that makes the poor towns taxes per student less than the value they receive per student, they should take what they can get. Am I misunderstanding?
Unless I’m misunderstanding the hypothetical, I don’t see how this is subsidizing the rich town. Is this the right way to think about it?[ul][li]Rich town: Pays $1,000 total taxes. Has 100 kids. Tax paid per kid in town: $10.[]Poor town 1: Pays $100. Has 1,000 kids. Tax paid per kid in town: 10 cents.[]Poor town 2: Pays $200. Has 200 kids. Tax paid per kid in town: $1.[/ul]If the Rich town says, “Look, we’re not going to pay more than $7 per student in our town,” they’d still be paying more taxes, including per kid. They’d still be subsidizing the other towns. The poor towns would be nuts to let them walk. Lots of variables missing–e.g., how much value do the towns actually get for their taxes paid? Assuming the rich town pays an amount that makes the poor towns taxes per student less than the value they receive per student, they should take what they can get. Am I misunderstanding?[/li][/QUOTE]
You are correct in as far as what I’ve laid out goes. But consider another aspect:
As a portion of the town’s total Valuation, what the less affluent towns pay for education is much greater. So the affluent town is also asking the less affluent towns to increase the percentage of what they pay (although this would be true if the affluent town left the district as well) of their overall worth.
Now. As a member of one of the less affluent towns - I could propose an “ability to pay” cap - which would look at the ration of town valuation over amount paid for education by each town - and the two LEAST affluent towns would then shift some of their burden onto the remaining towns. To me this is exactly the same as what the affluent town is doing - but to me it just continues the spiraling of trying to get someone else to pay for your share.
I think probably every town in the district could come up with some plausible formula that shows they should pay less. If one town does it, all towns should get their shot - which to me, underminds the whole point of being in a district. We could fight about this one issue for the next 10 years and not everyone would be happy - so I see this as opening that door.
OK - yes it’s actually happening somewhere, here in my district. I find myself struggling with what I feel is the right thing to do (let them leave) versus cowing to their demands to overall save the district from paying more. It just feels like extortion to me.
You could frame this differently, from the perspective of the rich town. They may say that they are tired of subsidizing other people. Why should we stay?
What if you were the “rich” guy? What if, hypothetically there are two restaurants you go to where they sell an identical steak dinner for $20. One of them decides that this is unfair so from now on rich people - and you are one of them - will pay $40 and poor people will pay $1. The other restaurant makes no change. Where would you be more likely to eat?
It’s just math for me, then. If the rich town has the power to walk, and you believe they will, then give up as much as you need to so that it minimizes the financial impact.
You’re not subsidizing the rich town in accepting this change. You’re just pissed that they’re subsidizing you less. And that may be well-placed ire. The rich do have a moral obligation, I believe, to subsidize their poorer neighbors. But I don’t have all the details, and I likewise believe that a line can be crossed where the rich guy has a point.
But that’s beside the point, really. It’s a matter of algebra, as you’ve framed it. If Richtown has the ability to walk if you don’t make the concession, and you believe they will, then make the concession if it’s financially advantageous relative to them being out of the picture completely. If there’s room for debate and negotiation, do it. Work the best deal you can. But at the end of the process, don’t cut off your nose…
But what if ALL restaurants decide to make this change (as in the state deciding what each town’s proportion is), and the rich guy goes into one restaurant and decides he’s going to pay $35 and demands the family at table 12 should make up the difference? How is the family at table 12 supposed to feel? They came into this restaurant knowing what their bill was going to be and now it’s different because the rich guy wants to pay less?
Of course the flip side is - so the rich guy decides not to eat at restaurants anymore - so everyone else’s bill must increase by $10 to make up for it.
Family at table 12 is feeling pinched between a rock and a hard place. I guess it comes down to either paying more overall and not paying for the rich guy’s food - or paying for a portion of the rich guy’s meal.
For the town that is threatening to leave - they can form their own (very small) district - they have no schools in their town - and pay tuition on a per kid basis to farm them out to neighboring towns. This makes their future payments unknown - but they get an immediate reduction in this next fiscal year - until the neighboring towns decide to increase tuition for towns not in their districts.
I know - a part of my resistance is just the feeling of injustice (or feeling powerless because the affluent town has the ca$h to call the shots) - but the practical side of me agrees with you. It is a bitter pill for me to swallow - but the alternative is probably worse.
This is where you continue to lose me. You’re not paying for ANY portion of the rich guy’s meal. What the rich guy is proposing is to pay for less of yours. If you have an argument that the rich guy (or rich town) is behaving badly, it doesn’t appear to be because the rich guy (or town) wants someone to foot his bill.
Hold your nose and vote for whatever is most beneficial to you! Even if it smells bad, paying more won’t decrease their power or ability to call the shots.
My point of view on this is that the rich town has a problem with how the STATE allocates resources (not giving them much subsidy because of their affluence and lack of kids). They want our district to compensate for how the state makes their allocation. They need to go talk to the legislature, since the other towns in the district have no influence on that issue.
Note that if the rich town had about 10 - 20 more kids, they wouldn’t be able to use the amount per kid metric to make their argument. This whole thing turns on variables that our town has no control over. In fact the rich town could just make a concerted effort to have more kids and solve their own problem! (I know that’s a silly argument)
Anyway - I understand the practical need to hold my nose on this.
At the end of the day, I guess they do see it as something you can control–in the very way they’re proposing. And the “something” here is, bottom line, “how much we pay in taxes per kid, versus how much we receive per kid.” However that accounting is rendered, and whatever filters it flows through, that’s Richtown’s issue. And the fact that their proposal is something that you see you’ll have to hold your nose and accept tells me that at the end of the process, they’ll still be paying more than they get (per kid), and you’ll receive the benefit of the gap, albeit at a lesser rate.
Is the state “subsidy” simply the state’s formula for divvying up the taxes it collected from the same districts it collected them from? It sounds like it, since Richtown’s solution is to cap the tax paid per kid. IOW, wherever the fungible funds in the state coffers theoretically originated, as a practical matter, who cares? It’s a stretch to call something a subsidy to me, that was collected entirely from me (and less than what was collected), when I net it all down.
The State uses taxes from the entire state - so that some of the subsidy coming to our district may originate from a town on the other side of the state. Just like the feds and how they allocate to the different states for any particular function. So - to me that amount is the State’s decision on which towns need more (or less) money to fund their education (based on many factors, property valuation and student count being two of them - special ed comes into play as well). So - in fact richtown could be receiving funds from richEST town somewhere across the state - it’s not really richtown’s own money. So all towns are all getting money from the common state coffer - just to varying degrees.
In a way you are correct - the richest people pay a larger percent of the total taxes collected by the state - so what they get back from the state is in a larger percent, theirs - but it is not delimited by what town they live in.
You keep saying the rich town has a problem with how the state allocates resources- but your OP also says
Rich town wants the district to change its formula because they have a problem with *the district’s formula * separate from any issue with the state’s formula.
It’s pretty obvious to me that the more affluent town is subsidizing the other towns - if affluent town wasn’t subsidizing the other towns, they would only be paying the costs for their own students. While the cost per student would certainly go up if the affluent town left, it wouldn’t double if affluent town has few students.
And BTW, the state almost certainly isn’t giving the rich town a subsidy. It is far more likely that the rich town sends more money to the state than it gets back , meaning that rich town is subsidizing poorer towns even on the state level, unless , of course by "rich town " you actually mean “slightly less poor town”. Dollars are fungible- if rich town sends $1000 in taxes to the state, and only gets $500 back, that town is subsidizing other towns. There comes a point when people (or towns) get tired of subsidizing others.
If it’s true that richDistrict will get more money (and poorDistrict will get less) if they are separate districts than one combined district, then it’s in richDistrict best interests to split off, if they can.
How, though, does richDistrict know they will actually get more funding separately than they currently do combined? If the state funding is per-pupil, for example, the two separate districts will get the same per-pupil funding before and after the split.
Well - yes the rich will always subsidize the poor. I think the rich should subsidize the poor - or middle or wherever you want to draw that line, for the good of society. If that were not the case no poor child would ever get a decent education or be able to rise out of poverty.
I feel like the state has determined where that line is in our district’s case and richtown has a problem with that. That is fine - and you’re right - our district takes what the state allocates and refines it in a manner which the Board can agree upon. In this case we have such a formula - and were SUPPOSED to be working on it this year to be as fair as possible - but it has proven to be very difficult because, no matter how you slice it, some towns will “lose” and some towns will “win”. So - they are putting off doing this for another year - and in the meantime, we have richtown taking their problem to the board in this form - which is absolutely their right.
My desire is to explore this situation and make an informed decision when it comes time to vote. As I said upstream, I am split and I want to feel better about my decision. It comes down to asking my neighbors to either pay more to lessen richtown’s apportioned amount (what other term can I use for this if not subsidize?), or to pay more (about twice as much more) because richtown will take their ball and go home. Part of me feels like saying fine - take your ball - but this feeling is from my gut, not my head.
We also have yet another town that is trying to abandon ship - they have already voted once to withdraw and we are waiting to see what their next vote will be. This throws a whole 'nother monkey into the mix - because if the town votes to withdraw - there is no way richtown will stay. So we’ll have paid extra and they’ll walk away anyway.
Are you wondering why forced consolidation can be tricky? We have a bizarre mix of towns (both affluent-wise and geographically located-wise) that have been forced together - and it has been very hard. I generally support the consolidation effort - but the manner in which it was done leaves a bit to be desired.
It’s not that richtown will get more funding if they leave - they would likely get the same (or less the way things have been going for everyone) from the state. However, they would have to pay less per student to get them educated because they would no longer have to pay our school district money as being a part of the district. They would have to pay this district money on a per student basis (I’m not sure what we charge for out-of-district kids - I need to find out) - but they could choose to send their kids to other districts - depending on what would work best for them.
What they would not get, however, are the benefits from being in a school district - like the ability to educate special education kids for FAR less money than it would otherwise cost and a shared way to pay for things like transportation.
If richtown leaves and suddenly they get an influx of kids to their town (let’s say 25 kids), they would pay MORE in education expenses than if they had stayed with our district. That is their choice - if they feel confident that the future will not throw them any curve balls - fine - but don’t come knocking back at our door in 2-3 years with a great plan to join our district. I guess this is the part of me that feels like they are asking for special consideration now - but would likely change their tune if the situation changes.
The other wording you could use is “accept/demand less of a subsidy from richtown”. You seem to believe that the amount the district currently asks the district to pay is objectively their fair share. It’s not. It’s their share based on the district’s allocation formula. It’s almost certainly not based on some objective criteria- such as X% of the students in the district live in richtown and therefore richtown should pay X% of the total cost. Or the schools located in richtown consume Y% of the budget and therefore richtown should pay Y% of the cost. If it were, richtown wouldn’t be paying twice as much per child as the other towns.
I don’t have a problem with the rich subsidizing the poor- I live in NYC which sends more money to Albany than it gets back and more money to Washington than it gets back. I do have a problem when the people getting subsidized seem to believe that if they get less of a subsidy, they are now subsidizing others- even though they are not covering their own costs. That restaurant- if a steak meal actually costs $20 and the rich are charged $40 and the poor are charged $1 , then anyone paying more than $20 is subsidizing someone else and anyone paying less is being subsidized. It doesn’t matter if it’s rich $40 /poor $1 or rich $21/poor $19 - in either case, the rich are subsidizing the poor. The difference is one of degree.
But - what exactly are your objective criteria? The state has it’s criteria and our district has it’s criteria. Among those criteria are town valuation, student count, population count, number of special ed students. Are you saying these are not objective criteria? What would your completely objective formula be?
Are you suggesting that ability to pay has no part in either of these formulas? If the formulas were straight out based only on # of kids - our town could not afford to educate its children. Is that the way to go?