Archived Information

School Finance: Chapter 70 Program

Aggregate Wealth Model Workbook

The Department's school finance staff has developed an Excel workbook illustrating the proposed aggregate wealth model for the Chapter 70 local contribution calculation. This model is described in the previously published paper, "Local and State Funding for Public Schools: Restoring the Link With Community Wealth".

The workbook allows the user to specify the factors for each of the three basic policy assumptions that are needed to calculate the local contributions:

1. What share of the statewide foundation budget should be funded by local contributions and what share should be funded by Chapter 70 state aid? (The ratio for individual communities will of course differ, with poorer communities having a larger state share and wealthier communities having a smaller state share.)

2. Should there be an upper limit on a municipality's local contribution? If so, what should that limit be (expressed as a percentage of the municipality's foundation budget)? Setting a limit ensures that all municipalities receive some state aid, even if they are very wealthy.

3. What share of a municipality's contribution should be derived from its property values and what share should be derived from the income level of its residents?

For purposes of discussion, the workbook sets the initial values for these factors as follows: local/state shares = 60%/40%; local contribution cap = 85%; and property/income shares = 50%/50%. But the user is invited to specify alternative values for each of these factors, and to note how the town-by-town results vary as the factors are changed.

As with any statutory formula, the final decision on the factors to be used will be made by the Legislature and the Governor.

But regardless of what factors are used, the underlying goal remains the same: communities of comparable wealth should be treated comparably. The model is designed to produce consistent results and to be faithful to this goal for any set of factors.