2004 Session

Budget Amendments - HB30 (Member Request)

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Chief Patron: Petersen
Median AGI in Composite Index Calculation

Item 146 #18h

Item 146 #18h

First Year - FY2005 Second Year - FY2006
Education: Elementary and Secondary
Direct Aid To Public Education FY2005 ($106,400,000) FY2006 ($111,900,000) GF

Page 105, line 15, strike "$2,920,427,133" and insert "$2,814,027,133".
Page 105, line 15, strike "$2,934,464,120" and insert "$2,822,564,120".
Page 108, after line 42, insert:
"e.  The Department of Education shall compute the composite index of local ability-to-pay for localities reflecting median Adjusted Gross Income indices.  The Department of Taxation shall furnish to the Department of Education such data as are necessary to implement these provisions."

(This amendment changes the current method of computing the LCI by using the median, not average, income. It reflects the fact that cities and counties with a relatively high personal income (which is used as a proxy for other taxation indices) do not actually benefit from said persons' income taxes - rather the state does - and that average income is a poor proxy for taxing potential. In order to more accurately reflect "ability to tax," the state should rely on median income, which finds the most common income amount, and not the average.)