• Rankings can be used - you know, "We're number 1." The problem with rankings is that they are a very sensitive measure. For example, in 99-00 East Hampton ranked #14 (out of 21 towns in our Education Reference Group D -  ERGD) in terms of spending per pupil. We rose to #9 in 01-02. Based on rankings then, we went from being in the bottom half of the ERGD to being in the top half. Good progress! However, when you look at the actual spending per pupil values for the 2 years, we went from 2% below average to 1.5% below average. Progress - yes. But not much real change. Also, the 99-00 ranking of 14 conveys the sense of a much poorer tax effort (i.e. has more psychological impact) than does being within 2% of average. If we in Common Sense wanted to spin the numbers on tax effort, we could have used rankings to present a better picture. We don't use rankings. They are too sensitive and can be misused.
• Then what about using spending? In the preceeding paragraph, we saw that our spending per pupil was below the ERGD average. Bad effort, right? Maybe not. Spending does not reflect the amount of State money received. Nor does it reflect the wealth of the spender. 
• Then what about using tax per capita? Taxes do reflect the impact of State aid and, therefore, are a better measure. Not the best though. Taxes don't reflect the wealth of the town. Surely, people in a poor town (e.g. Putnam) paying the same tax per capita as people in a wealthy town (e.g. Greenwich), aren't making the same tax effort. Those in the poor town are making a greater tax effort. So wealth must be introduced to get the right answer.
• Then what about using tax in relation to wealth? What should be used for wealth? There is income wealth and there is Grand List wealth. Tax per capita divided by income per capita is the tax rate imposed. Taxes divided by Grand List relates to mill rate. Both are useful ways to measure tax effort. The State defines an education tax effort (Equalized Education Tax Rate - EETR) using a combination of both wealth factors. EETR is basically equalized mill rate adjusted by a factor reflecting the average of income per capita and median household income.
• What about the effect of business tax base? For a given amount of taxes being raised, it makes sense to account for differing business tax bases. Individuals in a town shouldering the entire tax burden are making a greater effort than those in a town where 30% of the taxes are raised from businesses.
• What towns should our tax effort be evaluated against? It makes sense to compare with towns having similar needs. The State defines educational needs as being similar among the towns in our ERGD (Education Reference Group D) - that is, among towns with similar socio-economic factors. Clearly, our needs are not the same as Hartford's needs. For non-educational needs, we believe that comparisons should be made against similar-size towns. It makes no sense to compare with towns that are much smaller (they may not have a paid police force) nor to compare with much larger towns (they may have a not have a volunteer fire department).

East Hampton 2005-06 Tax Effort Summary

1. Education effort relative to DRGD average (no education-related debt included)

• Spending per pupil: 3% below average.
• Tax per capita divided by income per capita: 1% below average
• Non-business tax per income: 12% above average (the DRGD group of towns has a larger business tax base on average)
• Equalized mill rate (taxes related to Grand List): 22% above average
• EETR (State defined tax rate): 24% above average

2. Non-Education effort relative to Similar-Size town average (debt included)

• Spending per capita: 13% below average
• Tax per capita divided by income per capita: 1% above average
• Non-business tax per income: 7% above average
• Equalized mill rate: 11% below average