IT’S LEGAL… BUT IS IT RIGHT?
Have you heard about the two friends who each had the same lunch of soup, sandwich, beverage and dessert at a popular local restaurant? They planned to split the $35 bill at $17.50 each, but the server said that management had decided that the wealthier of the two should pay $20 and the other $15.
You’re saying this story can’t be true, but something very similar has really been going on with the Dighton-Rehoboth school budget since 2015 − with many more dollars involved.
In the late 1950’s, Dighton and Rehoboth wisely collaborated to build a regional high school, thereby realizing the mutual economic and educational benefits of shared instructional programs, staff and facilities for the students and taxpayers of the two communities. With everything under one roof and almost all operating costs held in common, the 1958 Dighton-Rehoboth Regional Agreement stated that the high school operating costs for each town were to be determined and apportioned based on its ratio of students to the total number of students. Costs and payment of costs were directly tied to student headcount − if you had 40% of the total number of students, you were liable for 40% of the total operating cost. The two towns each paid for what they used to educate their students.
The 1987 amended agreement, which regionalized grades K-8 in addition to the high school, maintained the same student ratio method for apportioning operating costs at the high school, but stated that the share of operating costs for K-8 would be apportioned on the basis of actual budgeted operating costs for each member town. The two towns each continued to pay for what they used to educate their students.
The 1993 Mass. Education Reform Act established goals and standards for the public education system along with a “foundation” level of spending for each school district to meet the goals and standards. To fund the foundation amount, each town is expected to spend a state-determined minimum contribution (based on ability to pay), with the state providing the difference via Chapter 70 aid.
In 2007, the Massachusetts Board of Education (BoE) approved revised regulations governing REGIONAL school district budgets. These new requirements affected how ONLY towns in REGIONAL districts assessed their budgets.
The new 2007 rules now allowed two ways for regional districts to calculate their budget assessments.
One way is called the Statutory Method. The Statutory Method’s formula dictates subtracting the combined total of each town’s specific state-assigned required minimum contribution amount and total district revenues (such as state Chapter 70 and transportation reimbursement, among others) from the total district operating cost. Any remainder is apportioned per the district’s regional agreement.
The Statutory Method thus allows some towns in regional districts to avoid paying for what they use to educate their students, necessarily requiring other towns in the district to pay the difference. This is because the Statutory Method assessment calculation formula requires that each town combine their state-assigned minimum contributions, which can obscure a wealthier town’s inequitable share of the regional district’s required total minimum contribution. Furthermore, the BoE stipulates that any above minimum amount cannot be divided such that a town would lose the “benefit” it receives for being a “less wealthy community.” For Dighton-Rehoboth (which strives for district-wide parity) using the Statutory Method means that, using D-R business office data, for fiscal year 2018 it costs Rehoboth $9,950 to educate each of its students, while Dighton spends $5,798 for each of theirs − a difference of $4,152 PER STUDENT.
The difference in the two methods for 2018 is a swing of $2,965,511.
Based on total district operating cost and student enrollment, Dighton needs a minimum of $10,856,675 to pay for its students’ education; however, by using the Statutory Method, it contributes only $7,891,164. By rule, because it is in a REGIONAL district, Rehoboth must pay Dighton’s $2,965,511 shortfall. Therefore, using the Statutory Method forces Rehoboth to subsidize the cost of Dighton’s students’ education.
The other way is called an Alternative Method, which permits more flexibility in allocating assessments. Using an Alternative Assessment (see illustration) allows assessment based on the ACTUAL COSTS spent by each town to educate its students, and in fact had been used until 2014 by the D-R regional district since its beginning over fifty years ago. Many regional districts currently use an Alternative Method.
So, why not use an Alternative Method?
In the example, each town most importantly pays for what it uses − its students −
but remarkably the rules prohibit using an Alternative Method if ONLY ONE TOWN in a regional district objects to it − necessitating using the Statutory Method by default. The other regional district member towns have no other choice in the matter.
The state’s bias toward using the Statutory Method shifts our focus from the number of students in each community to the wealth of each community, and steers regional districts toward using the Statutory Method by making it financially attractive and easier for less wealthy towns to choose it rather than an Alternative Method.
Implementation of the Statutory Method for the D-R regional district began in 2015. That year, the difference between the statutory and the alternative calculation methods (as in the illustration) was over $925,000. Each year since then, the gap has trended higher, and through 2018 now cumulatively totals over $6.25 million.
We are frequently reminded that we are one district. Now, if we are truly one district, and about 47% of our student population resides in Dighton, then it is the responsibility of the Dighton taxpayers to pay for an education for that 47% --- not just 32%.
Notice that instead of each town paying for what they use, as Dighton’s enrollment steadily increases, their payment share steadily decreases. As Rehoboth’s enrollment decreases, their payment share increases!
Rehoboth taxpayers have to provide for enough students of their own, without having to take on the extra burden of providing for some of Dighton’s students.
Obviously, whatever Dighton doesn’t have to pay to educate students who reside in their town, can help provide for its other town expenses, such as police, fire and highway, because Rehoboth is paying part of its school cost share for them. Accordingly, when Rehoboth pays part of Dighton’s school costs, it deprives Rehoboth of capital that could help support its own equally important expenses, such as the need for improvements to both D.L. Beckwith and Palmer River Schools or a new municipal building.
Using an Alternative Assessment Method could help correct this imbalance.
In short, while we must accept that the 1993 Education Reform Act requires Rehoboth to assume more of its foundation budget portion due to its more “wealthy” status, Ed. Reform and subsequent regulations do not require that Rehoboth un-necessarily support any of Dighton’s school financial commitments, which can happen when using the Statutory Method.
There are many reasons to regionalize, but cost reduction and savings are perhaps its principal incentives. These were major factors leading to construction of our high school almost sixty years ago. In 1987, the towns regionalized K-8 partly to benefit from a transportation reimbursement offered by the state. Unfortunately, employing the Statutory Method is inconsistent with the promotion of economic fair play, because using the Statutory Method can force a “wealthier” town to assume a disproportional financial responsibility for the educational expenses of a regional district. This is a burden with which a non-regionalized town does not have to contend, and discourages, rather than enhances, a regional relationship.
It is highly doubtful that Rehoboth would have signed the original 1958 regional agreement under the payment terms of the Statutory Method.
We must remember that the state does not mandate that we must use only the Statutory Method. It also allows for the use of an Alternative Assessment Method. The Statutory Method’s design can result in a financial gain for a less wealthy town and a loss for a wealthier town in a regional district. But the wealth of a community can change over time. By using an alternative method, we could consistently apportion costs according to student enrollment, thus ensuring equitable assessments no matter how each town’s wealth or student enrollment changed. Neither town would profit at the expense of the other.
Each town would just pay its own fair share.