Amherst Tax-Exempt Housing and

Public School District Funding

October 17, 2018

Amherst Tax-Exempt Housing and Public
School District Funding

Prepared by the UMass Donahue Institute’s

Economic & Public Policy Research Group

Project Leader
Rod Motamedi

Project Staff
Michael McNally

The University of Massachusetts Donahue Institute is an outreach and economic development arm of the
University of Massachusetts President’s Office. Established in 1971, the Institute strives to connect its
clients with the resources of the University, bridging theory and innovation with real world public and
private sector applications. For more information: www.donahue.umassp.edu.

The Institute’s Economic and Public Policy Research (EPPR) group is a leading provider of applied research,
helping clients make more informed decisions about strategic economic and public policy issues.

EPPR produces in-depth economic impact and industry studies that help clients build credibility, gain
visibility, educate constituents, and plan economic development initiatives. EPPR is known for providing
unbiased economic analysis on state-level economic policy issues in Massachusetts and beyond, and has
completed a number of industry studies on IT, defense industries, telecommunications, health care, and
transportation. Their trademark publication is called MassBenchmarks, an economic journal that presents
timely information concerning the performance of and prospects for the Massachusetts economy, including
economic analyses of key industries that make up the economic base of the state.
Amherst Tax-Exempt Housing and Public School District Funding

Contents

Acknowledgments............................................................................................................... iv
Introduction ........................................................................................................................ 1
Methodology....................................................................................................................... 2
Background on School Districts, Costs, and Tax Estimates................................................. 3
Estimating the Tax Contribution to Educating Children in UMass Housing ..................... 10
The Cost and Contribution Scenarios ............................................................................... 12
Conclusion ......................................................................................................................... 16

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Amherst Tax-Exempt Housing and Public School District Funding

List of Tables

Table 1. Amherst and Amherst-Pelham Enrollment ........................................................... 5

Table 2. Enrollment by Race/Ethnicity................................................................................ 5
Table 3. Selected Student Populations ............................................................................... 6
Table 4. Per-Pupil Expenditures, 2016 (Adj. for 2017 $’s) .................................................. 6

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Amherst Tax-Exempt Housing and Public School District Funding

List of Figures

Figure 1. Amherst-Pelham Regional School District ........................................................... 3

Figure 2. Households by Type, Amherst and Massachusetts ............................................. 4

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Amherst Tax-Exempt Housing and Public School District Funding

Acknowledgments

The Donahue Institute would like to thank Michael Morris, Superintendent of Amherst
and Amherst-Pelham Schools; David Ziomek, Assistant Town Manager for the Town of
Amherst; Tony Maroulis, Executive Director of External Relations and University Events;
David Burgess, Principal Assessor for the Town of Amherst; Claire McGinnis, Treasurer
for the Town of Amherst; Sean Mangano, Director of Finance at Amherst Pelham
Regional School District and many others, for their help in the creation of this report.

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Amherst Tax-Exempt Housing and Public School District Funding

Introduction

The relationship between a university and its host community is often beneficial to both while also
presenting occasional challenges. A healthy public school system allows a university to better attract
faculty, staff and graduate students while universities provide employment and amenities such as
events, museums, and recreation for local residents. However, universities are often exempt from
certain tax payments due to their state or non-profit status. One such payment is property tax.
Residence halls, academic buildings and other structures owned by a tax-exempt university are not
subject to local property tax, meaning that although a campus may benefit from certain public services,
tax is often not being paid toward those services.

In the case of UMass Amherst, the campus does pay for local water and sewer services, various permits,
as well as some other support through agreements with the Town of Amherst. The campus does not
currently directly contribute toward the cost of the public education of the children who live on the
UMass campus. To help in their ongoing negotiations on the issue of education funding for children on
campus, UMass Amherst, in coordination with Amherst Public Schools and the Town of Amherst, has
engaged the Donahue Institute to develop the following report, which will provide an overview of the
financial impact of students from UMass Amherst tax-exempt housing on Amherst public schools. It will
also examine what amount of property taxes would be paid by the families of these students if they
lived in taxable property.

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Amherst Tax-Exempt Housing and Public School District Funding

Methodology

Data was collected from a combination of local, state and national sources. Demographic data was
provided by the American Community Survey, a product of the U.S. Census Bureau. Data specific to the
districts came primarily from the Department of Elementary and Secondary Education (DESE) of the
Commonwealth of Massachusetts, with data gaps filled with the help of Superintendent Morris and the
staff of the Amherst and Amherst-Pelham Regional school districts. The estimate of property tax for
UMass family housing at the North Village Apartments was done by David Burgess, Chief Assessor for
the Town of Amherst, using rental data provided by UMass. Expenditure data came from the DESE and
the Town of Amherst, again with assistance from Amherst and Amherst-Pelham Regional public school
staff.

This study focuses on the Amherst School District as the primary geographic region for demographic
information. For expenditure information, this report will focus on the Amherst and Amherst-Pelham
Regional school districts exclusively, with emphasis on the portion of their funding supplied by the Town
of Amherst.

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Amherst Tax-Exempt Housing and Public School District Funding

Background on School Districts, Costs, and Tax Estimates

Overview of Public Schools around Amherst

Figure 1. Amherst-Pelham Regional School District

Above: Amherst-Pelham Regional School District which provides secondary education for four smaller elementary school districts.
Note: Leverett and Shutesbury elementary schools are not part of the Amherst-Pelham Regional School District.

There are two public school districts that cover the Town of Amherst area. The Amherst School District
includes all elementary schools, i.e. grades K-6, which serve the town: Fort River, Wildwood and Crocker
Farm. Amherst-Pelham Regional School District covers secondary education in the region and also
includes students from the towns of Pelham, Shutesbury and Leverett. Organizationally, both Amherst
and Amherst-Pelham share the same central administration, including the same superintendent
(Michael Morris) although there are distinct committees which help manage the two districts. To further
clarify, in this report, when the Amherst School District is discussed, it means only the primary schools
within the Town of Amherst. When the Amherst-Pelham School District is discussed, it means only the
middle school and high school in the Town of Amherst. The geographic region of the Amherst School
District is part of the larger Amherst-Pelham Regional School District geographic region, but the two
districts have distinct budgets, costs and student populations.

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Amherst Tax-Exempt Housing and Public School District Funding

District Demographics
The Town of Amherst has a population of 39,724 people and 60 percent of that population is between
the ages of 15 and 24. There are 8,955 households with an average size of 2.59 people per household.
Approximately 2,489 students attend the Amherst and Amherst-Pelham school districts.

Figure 2. Households by Type, Amherst and Massachusetts

1,627,194, 64%

3,084, 53%
4,171, 47%

1,200,167, 36%

Total Family households: Total Nonfamily households:

Amherst Massachusetts

Source: U.S Census, American Community Service (ACS) 5-Yr 2012-2016

Of those households, 4,171 (or 47 percent) contain families. The average family size is 2.93 which is
smaller than in the state as a whole where the average family size is 3.15. Just over 20 percent, or 1,916
households have children, below the state average of 27 percent. This a decrease from 2010 where 23
percent of households had children in Amherst and 30 percent had children statewide.

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Amherst Tax-Exempt Housing and Public School District Funding

Table 1. Amherst and Amherst-Pelham Enrollment

Amherst & Amherst-Pelham School Districts, Enrollment by Grade (2017-2018)

Grade: PK K 1 2 3 4 5 6 7 8 9 10 11 12 SP Total
Crocker Farm
65 36 41 51 53 58 39 65 0 0 0 0 0 0 0 408
Elementary
Fort River
0 33 45 46 43 45 73 50 0 0 0 0 0 0 0 335
Elementary
Wildwood
0 52 52 58 56 56 70 59 0 0 0 0 0 0 0 403
Elementary
Amherst
0 0 0 0 0 0 0 0 0 0 241 233 221 228 10 933
Regional High
Amherst
Regional Middle 0 0 0 0 0 0 0 0 194 216 0 0 0 0 0 410
School
Combined
65 121 138 155 152 159 182 174 194 216 241 233 221 228 10 2,489
District Total

Source: Massachusetts Dept. of Elementary and Secondary Education (DESE)

Again, the Amherst school district is made up entirely of the three elementary schools while the
Amherst-Pelham Regional District represents the secondary schools of Amherst Regional Middle and
High Schools.

Table 2. Enrollment by Race/Ethnicity

Enrollment by Race/Ethnicity (2017-2018)

Race Amherst Amherst-Pelham State
African American 9.9% 7.1% 9.0%
Asian 14.4% 9.2% 6.9%
Hispanic 21.8% 16.2% 20.0%
Native American 0.3% 0.1% 0.2%
White 45.7% 58.2% 60.1%

Native Hawaiian, Pacific Islander 0.0% 0.2% 0.1%

Multi-Race, Non-Hispanic 7.9% 9.0% 3.6%

Source: Massachusetts Dept. of Elementary and Secondary Education (DESE)

The Amherst school district student population is more ethnically and racially diverse than the statewide
population overall. In contrast, the Amherst-Pelham district population has a higher representation of
Asian and multi-race individuals than the state, but less representation in other groups.

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Amherst Tax-Exempt Housing and Public School District Funding

Table 3. Selected Student Populations

Selected Populations (2017-2018)

Student Population Amherst Amherst-Pelham State
First Language not English 24.1% 13.8% 20.9%
English Language Learner 16.5% 6.0% 10.2%

Students With Disabilities 21.0% 19.9% 17.7%

High Needs 49.3% 38.8% 46.6%

Economically Disadvantaged 33.4% 25.2% 32.0%

Source: Massachusetts Dept. of Elementary and Secondary Education (DESE)

Amherst School District has a larger percentage of English Language Learner (ELL) students than the
state overall, as well as a higher percentage of students with additional needs. The opposite is true for
the Amherst-Pelham Regional School District which has lower shares than the state of all populations
besides students with disabilities.

Table 4. Per-Pupil Expenditures, 2016 (Adj. for 2017 $’s)

In-District In-District Expenditures Total Total Total Expenditures

District
Expenditures Per Pupil Expenditures Pupil FTEs per Pupil
Amherst $25,178,847 $21,811 $27,049,038 1,268 $21,341
Amherst-Pelham $28,537,720 $20,717 $32,820,564 1,567 $20,941
Total $53,716,567 $21,264 $59,869,601 2,835 $21,141

Source: Massachusetts Dept. of Elementary and Secondary Education (DESE)

Overview of Amherst Public School Students from the UMass Campus

In the 2017-2018 school year there were 52 students who lived on the UMass Amherst campus and
attended local public schools. More than 80 percent of those students were in elementary school. Public
school students who live on UMass campus are generally children of graduate students and live in family
housing in the North Village Apartments.

UMass Amherst graduate programs attract international students who may not have English as their
first language. As a result, their children are more likely to be English Language Learners (ELLs). Of the
children who reside on campus, 38 percent are ELLs. For comparison, statewide the rate is 10 percent
and for the Amherst District the rate is 17 percent.

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Amherst Tax-Exempt Housing and Public School District Funding

These students are also more likely to be high need because they are more likely to need English
language instruction or because they are more likely to be defined as low income. 1 Out of all children of
UMass residents, 75 percent are eligible for the free or reduced lunch program. In 2014, 35 percent of
the total students in the Amherst school district were eligible for the lunch program compared to 34
percent statewide. Graduate students, even those who receive a stipend, often earn less income than
they would working full-time. They are also limited in their ability to supplement their income with part-
time work due to their academic obligations; their immigration status, which may prevent work (e.g.
international students); and the regular demands of parenting. These factors combine to reduce
graduate student incomes which makes some children high need regardless of their ELL status.

Other needs for this population are generally the same as district-wide averages. The children of
graduate students do not experience disability at higher rates than the rest of the district. The UMass
family housing is also along existing bus routes so no additional transportation cost is incurred.

Overview of Taxes and Costs

UMass Amherst and Taxes
As a state institution, UMass Amherst does not pay property tax on its various buildings. It does provide
financial support other ways. A $120,000 fee is paid each year by UMass to the Town of Amherst for
general services provided by the town that are used by students, faculty and staff. UMass also pays for
its use of town emergency services such as ambulance coverage. Additionally, occupancy fees are paid
on stays at the UMass hotel. Residents of properties owned by UMass pay some local taxes, such as the
local portion of the meals tax and excise tax on vehicles. Finally, all UMass employees and students are
subject to state income taxes and sales taxes.

Property Taxes and State Aid

It should be noted that no part of property tax is specifically earmarked for education. All revenues for
the Town of Amherst are put in a single pool which is then divided out, which can obscure exactly how
much of each dollar of property tax goes to public education. On average, between 2011 and 2016, the
town’s expenditures on education were equal to 68 percent of property tax revenues.

In that same period, Chapter 70 state aid covered approximately 17 percent of the cost of educating
children in Amherst. Beyond Chapter 70, the Commonwealth has agreed to certain PILOT 2 payments to
the town to offset some costs related to UMass. The agreement that governs these payments is

1 A student is high need if “he or she is designated as either low income (prior to School Year 2015), economically
disadvantaged (starting in School Year 2015), or ELL, or former ELL, or a student with disabilities.”
<http://profiles.doe.mass.edu/help/data.aspx?section=students>
2 Payment in lieu of taxes (PILOT) are payments that tax-exempt entities agree to pay to offset some of their costs to the
community.

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Amherst Tax-Exempt Housing and Public School District Funding

between the Commonwealth of Massachusetts and the Town of Amherst, not UMass and the Town.
These payments are also subject to appropriations and have recently been declining.

Comparison of Costs
Table 5. Per-Pupil Expenditures Comparison, Amherst-Pelham 2016 (Adj. for 2017 $)

District Name Total Expenditures Total Pupil FTEs Total Expenditures per Pupil
Watertown $58,547,405 2,767 $21,161
Amherst-Pelham $32,820,564 1,567 $20,941
Dedham $53,340,419 2,789 $19,123
Berkshire Hills $26,826,892 1,421 $18,880
Maynard $23,202,115 1,526 $15,207
Amesbury $35,237,625 2,366 $14,891
Northampton $42,959,599 2,950 $14,564
Ayer Shirley $28,096,975 1,953 $14,390
Southwick-Tolland-Granville Regional $24,314,150 1,706 $14,253
Blackstone-Millville $25,091,052 1,843 $13,614
Lunenburg $22,670,040 1,710 $13,259
Source: DESE, Per-Pupil Expenditure’s Report 2016, Comparable districts Identified by the DART Tool

The Amherst-Pelham district is the 148th largest by expenditure and 186th largest by student count, out
of 322 school districts statewide (including vocational districts). Using the DESE District Analysis and
Review Tool (DART), which identifies comparable districts based on demographics and other features,
Amherst-Pelham is on the upper end of per-pupil spending amongst the ten most comparable districts.

Table 6. Per-Pupil Expenditures Comparison, Amherst 2016 (Adj. for 2017 $)

District Name Total Expenditures Total Pupil FTEs Total Expenditures per Pupil
Up-Island Regional $11,976,218 436 $27,487
Lincoln $27,352,345 1,229 $22,263
Amherst $27,049,037 1,268 $21,340
Brewster $10,302,437 512 $20,142
Middleton $11,685,464 709 $16,486
Northborough $29,188,614 1,789 $16,319
Plainville $11,713,710 760 $15,421
Somerset $26,674,522 1,817 $14,685
Kingston $15,150,689 1,115 $13,594
Orange $9,050,685 714 $12,676
Acushnet $16,040,283 1,296 $12,378
Source: DESE, Per-Pupil Expenditure’s Report 2016, Comparable districts Identified by the DART Tool

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Amherst Tax-Exempt Housing and Public School District Funding

The Amherst district is the 177th largest by total expenditure and 213th by student count, out of 322
districts statewide (including vocational districts). According to DART, the Amherst district, like the
regional district, is at the top end of per pupil spending among comparable districts.

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Amherst Tax-Exempt Housing and Public School District Funding

Estimating the Tax Contribution to Educating Children in

UMass Housing

While the demographics and current expenditures of local public schools has been defined, the cost of
educating a student from UMass campus has not. If all children of UMass families lived in taxable
housing in Amherst they would be paying property tax as their primary contribution to the education of
their children. Because over 90 percent of UMass families with children live in the North Village
Apartments, that complex will be the basis for our property tax estimate.

Property Taxes for a Typical UMass Student Family with a Child

There are a total of 190 units in the North Village Apartment Complex. The complex contains both one
and two-bedroom units, as well as accessible units. Using the same methodology as would be applied to
a taxable apartment complex, the Town of Amherst’s Assessor, David Burgess, produced an estimate of
the property tax assessment for North Village as if it were taxable property.

Table 7. North Village Apartment Tax Estimation

Property Tax Estimated using FY2018 Tax Rate

Rent $1,800,000
After vacancy of 5% $1,710,000
After expenses of 35% $1,111,500
Value 10% Cap Rate (Taxable Value) $11,115,000
Taxes: $21.14/1000 $234,971
Units 190
Tax per unit $1,237
Source: David Burgess, Town Assessor

In FY2018, if not exempt, Amherst’s North Village Apartments would be assessed approximately
$235,000 in property tax which equates to an average tax of $1,237 per unit. With 52 students living on
campus and the average per-pupil expenditure in Amherst being over $20,000 dollars, simply taking the
property tax for the entirety of North Village would come up nearly three-quarters of a million dollars
short of the probable cost of educating the students living on campus. This finding highlights the fact
that few households in Amherst (or in other towns) pay the full cost of educating a child. Rather, school
funding relies on all taxpayers contributing to the general fund and thus toward education regardless of
whether the taxpayer has children in the public schools. Additionally, a part of school funding is not
derived from local revenues but rather is paid for by Chapter 70 state aid.

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Amherst Tax-Exempt Housing and Public School District Funding

Per-Pupil Expenditure for a Typical UMass Student Family with a Child

The most straightforward estimation of the cost of public education for one student is per-pupil
expenditure, which can be derived by taking the sum of an entire district’s expenditures divided by the
number of students within that district.

In FY2016, adjusted for inflation, the per-pupil expenditure for the three elementary schools in the
Amherst District was $21,341 and in the Amherst-Pelham District (i.e. middle and high school), the per-
pupil expenditure was $20,941. Each community within each district is not paying the full cost of
educating a student via local tax assessments. Part of the cost is covered by state aid and another is
covered by school choice students, whose home districts contribute “tuition” to the students’ chosen
district. Nonetheless, the majority of per-pupil cost still falls on the communities that send students to
public schools.

However, since this report is interested in the students who come from the UMass Amherst campus it
needs to focus on the per-pupil expenditure of students from the Town of Amherst. The specific per-
pupil expenditure on a student from Amherst in both districts can be determined by taking the town
expenditure on schooling divided by the number of full-time equivalent students from the town. For the
Amherst District, which only covers elementary schools in the town, all students with the exception of
school choice students are from Amherst. In 2016, this was over 90 percent of the student population.

However, the Amherst-Pelham District includes school choice students as well as students from
Shutesbury, Pelham and Leverett. Amherst is still the largest contributor of students to the district.
Between 2006 and 2017, 75 percent of all students at the Amherst-Pelham District were from the Town
of Amherst. The per-pupil expenditure for an Amherst student in the Amherst-Pelham schools is the
total town expenditure for the district divided by the count of total students from the Town.

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Amherst Tax-Exempt Housing and Public School District Funding

The Cost and Contribution Scenarios

Defining the fair contribution toward the education of each student from the UMass campus is largely
subjective. This analysis does not claim to provide “the number”. Rather it aims to provide a selection of
approaches that will provide an objective look at the cost of educating a child in Amherst and the actual
contribution of community members toward these costs. For this reason several scenarios are defined
that can provide the starting point for ongoing conversations between the Town of Amherst and UMass.

In the following tables, a range of potential costs are presented. On the high end is per-pupil
expenditure plus the cost of any additional needs for this specific population. Next is the direct per-pupil
expenditure, specific to the Town of Amherst. The middle option is the town’s per-pupil cost, i.e.
expenditure reduced by the share of state aid typically provided to the town. The last two options are
the average property tax on a parcel in Amherst followed by the property tax that would be assessed on
the North Village Apartments if they were private, taxable property.

The two tables are based on two different time periods. The first table is based off the average
expenditures and student populations of the two districts between FY2006 and FY2016. These values
adjust for fluctuations year to year and reflect the typical cost in a given year. The second table is based
off of FY2016 student populations and expenditures, and provides a better sense of recent expenditure.
All values are adjusted for inflation in 2017 dollars.

Table 8. Cost per Student Estimates (FY2006-FY2016 basis)

Time Period: FY2006-FY2016 Co

Per Pupil Exp. + ELL

Per Pupil Exp. (Raw)

Per Pupil Cost. (Exp. less Ch.70)

Property Tax (Avg. Amherst Parcel)

Property Tax FY18 (Per North Village unit)

Source: DESE and Town of Amherst, Calculations by UMass Donahue Institute

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Amherst Tax-Exempt Housing and Public School District Funding

Table 9. Cost per Student Estimates (FY2016 basis)

Estimated Costs Per Student, by school type.

All values adjusted for 2017 Dollars

Cost Per Student Cost Per Amherst Student Cost Per Amherst-Pelham
Time Period: FY16
(Combined) (Primary School) Student (Secondary School)

Per Pupil Exp. + ELL $17,220 $22,067 $14,601

Per Pupil Exp. (Raw) $17,025 $21,811 $14,475

Per Pupil Cost. (Exp. less Ch.70) $14,261 $18,270 $12,125

Property Tax (Avg. Amherst $7,059 $7,059 $7,059

Parcel)

Property Tax FY18 (Per North $1,237 $1,237 $1,237

Village unit)

Source: DESE and Town of Amherst, Calculations by UMass Donahue

The levels are defined as follows.

Option 1: Per-Pupil Expenditure plus Additional ELL Education

(𝐸𝐸𝐸𝐸𝐸𝐸 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑃𝑃𝑃𝑃𝑃𝑃 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 ∗ 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝐸𝐸𝐸𝐸𝐸𝐸 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈)
= 𝐸𝐸𝐸𝐸𝐸𝐸 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑝𝑝𝑝𝑝𝑝𝑝 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 + 𝑃𝑃𝑃𝑃𝑃𝑃 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝐸𝐸𝐸𝐸𝐸𝐸. = 𝐴𝐴𝐴𝐴𝐴𝐴. 𝑃𝑃𝑃𝑃𝑃𝑃 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝐸𝐸𝐸𝐸𝐸𝐸.
𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑆𝑆𝑆𝑆ℎ𝑜𝑜𝑜𝑜𝑜𝑜 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆

This option reflects the fact that students from the UMass campus need English language instruction at
higher rates than their peers. English language instruction is already captured in the average per-pupil
expenditure value regardless of whether students use the program. However, the students residing on
campus are more than twice as likely to be English language learners as the overall elementary school
population. Compared to the overall secondary school population of the Amherst-Pelham District, they
are more than six times as likely to need ELL services. The per-pupil cost of ELL services was calculated
based on data provided by the district. This value was then multiplied by the number of students from
the UMass campus who need ELL. This sum, the total cost of ELL education for UMass residents
attending public school, was divided by the total number of UMass children to create a per-UMass
student ELL cost which could then be added to the total per-pupil expenditure. This creates some
double counting, because ELL is already counted as an expense in school expenditure. However, in the
interest of ensuring that additional ELL use is explicitly recognized for this group of students, this first
option provides an idea of how much additional cost would be incurred. It is a small increase over the
typical per-pupil expenditure but is worth noting.

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Amherst Tax-Exempt Housing and Public School District Funding

Option 2: Per-Pupil Expenditure

𝐴𝐴𝐴𝐴ℎ𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸
= 𝑃𝑃𝑃𝑃𝑃𝑃 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑜𝑜𝑜𝑜 𝐴𝐴𝐴𝐴ℎ𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆

The second highest option of per-pupil cost is the total expenditure per student for each of the districts
attended by the students. Per-pupil expenditure overestimates per-pupil cost to the town due to the
offsetting effects on town costs of school choice students and Chapter 70 state aid. For students
attending Amherst elementary schools, the simple calculation above represents the actual per-pupil
expenditure well. The calculation of per-pupil expenditures for Amherst-Pelham middle and high school
students is modified to reflect the share of district students from the Town of Amherst alone, who are
about 75 percent of the district total between 2006 and 2016 or 77 percent in FY2016. The Amherst-
Pelham per-pupil expenditure is much lower than the Amherst per-pupil expenditure in these tables.
This is because the town is responsible for only part of the total expenditure for the Amherst-Pelham
District, whereas it is entirely responsible for the Amherst District.

The levels presented in Table 8 and Table 9 differ from the per-pupil values presented in Table 4 through
Table 6. In one case, it is because values are based off the average expenditure and student population
over a 10-year period. For the point estimate, based on FY2016 alone, the values still differ because they
are recalculated from Town of Amherst budgets and adjusted for inflation in 2017.

Option 3: Per-Pupil Cost (Expenditures Reduced by State Aid.

𝑃𝑃𝑃𝑃𝑃𝑃 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 ∗ (1 − 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝐴𝐴𝐴𝐴𝐴𝐴 𝑆𝑆ℎ𝑎𝑎𝑎𝑎𝑎𝑎 𝑜𝑜𝑜𝑜 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸) = 𝐴𝐴𝐴𝐴𝐴𝐴. 𝑃𝑃𝑃𝑃𝑃𝑃 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶

This scenario reflects an estimate of the Town’s contribution toward per-pupil expenditures, i.e. the
Town’s per-pupil costs. It accounts for the share of education expenditures covered by Chapter 70 state
aid while leaving the majority of the costs to be carried by the Town of Amherst. Over the 10-year
period between 2006 and 2016, state aid was approximately 18 percent of the total school expenditure
for the Town of Amherst. In 2016 (the most recent year of that period) it was 16 percent. The part of
total expenditure which is attributable to the state is removed from the per-pupil expenditure value,
leaving an adjusted per-pupil cost to the town.

Option 4: Average Property Tax for the Town of Amherst

𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑇𝑇𝑇𝑇𝑇𝑇 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝑓𝑓𝑓𝑓𝑓𝑓 𝐴𝐴𝐴𝐴ℎ𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒
= 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑇𝑇𝑇𝑇𝑇𝑇
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑖𝑖𝑖𝑖 𝐴𝐴𝐴𝐴ℎ𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒

This option presents an estimate of the average property tax paid on a parcel in Amherst. It includes
both residential and commercial parcels and therefore overestimates what a typical homeowner in
Amherst pays toward town finances.

Option 5: Per Unit Property Tax for the North Village Apartments
𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉 𝑜𝑜𝑜𝑜 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁ℎ 𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉 ∗ 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃. 𝑇𝑇𝑇𝑇𝑇𝑇 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
= 𝑃𝑃𝑃𝑃𝑃𝑃 𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁ℎ 𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃. 𝑇𝑇𝑇𝑇𝑇𝑇
𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈𝑈 𝑖𝑖𝑖𝑖 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁ℎ 𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑔𝑔𝑔𝑔

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Amherst Tax-Exempt Housing and Public School District Funding

The fifth option was examined in detail in Table 7. This scenario treats the North Village complex as if it
were a taxable complex like any other within the Town of Amherst. The taxes were estimated by
Amherst Assessor David Burgess. The estimated property tax paid by these dwellings would go into the
general fund and contribute toward education regardless of whether the residents had school-aged
children. As mentioned earlier, this is well below the actual cost of educating these students but the
property tax paid by the average property owner in Amherst (see above) is also well under the cost of
educating a child. This scenario represents the best estimate of the actual property taxes these families
would pay if they lived in the Town of Amherst in taxable property identical to the apartments they
occupy now.

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Amherst Tax-Exempt Housing and Public School District Funding

Conclusion

Education is an essential public good whose continuing funding is dependent on a large part of the
community contributing even though they are childless. Educating young minds, early and well, pays
dividends to the community as a whole that are difficult to precisely quantify but are nonetheless vital
to the health of that community. This report is intended to cast some light on the question of the costs
of education and individual contributions to those costs.

This report finds that the typical homeowner does not contribute nearly enough in property taxes to
cover the cost of educating one student. Furthermore, these contributions scale up or down depending
on the type of home occupied. The cost of educating a child is itself a multifaceted issue: what services
does the child require and what is the town’s contribution versus the state’s? Ultimately, this report
does not attempt to provide an answer to what the Town of Amherst and University should do but
rather offers a set of objective facts to form the beginning of a discussion. Whatever decisions it may
lead to, it is reflective of the willingness of the entire Amherst community, town and gown, to take the
time to ensure all who are able are doing what they can to support the education of the community’s
children.

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