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Massachusetts Referendum on Taxing College Sports and Revenue Sharing

Following the U.S. Supreme Court’s reversal of the 1984 Chevron ruling in June, various leaders in higher education expressed relief across the political spectrum. The original Chevron decision had granted regulatory agencies considerable authority in areas not explicitly addressed by Congress, resulting in regulatory fluctuations over recent years that significantly impacted colleges and universities.

Frequent shifts in administration often induced drastic changes in higher education regulations, fostering an environment of uncertainty that hindered innovation and investment within the sector. Observers noted that judicial rulings, such as Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo, which overturned the Chevron precedent, could eventually create a more stable legal landscape regarding these regulatory changes.

The current Higher Education Act prohibits incentive compensation for student enrollment. However, a 2011 letter from the Department of Education indicated that the ban did not extend to third parties providing bundled services. This clarification has played a pivotal role for companies like 2U in the online program manager sector to share revenues with colleges. The validity of this letter remains uncertain in a post-Chevron environment, as it appears to contradict the intentions expressed by lawmakers in the Higher Education Act.

Concurrently, discussions concerning the taxation of college sports are intensifying amidst notable changes in college athletics, particularly concerning NIL (name, image, likeness) agreements. Speculation surrounds the possibility that the IRS may classify revenues generated from college athletics as unrelated business income, potentially leading to taxation that could significantly alter the operational landscape of college sports programs.

Massachusetts’ Referendum on the MCAS Graduation Requirement

As Massachusetts nears a pivotal referendum, public discourse indicates that voters may consider eliminating the necessity for students to pass the MCAS (Massachusetts Comprehensive Assessment System) exams for graduation. Critics of this potential move contend that it may negatively affect educational standards.

While there is acknowledgment that improvements to the MCAS exams are possible, the existence of an independent evaluation is seen as crucial to ensuring students have effectively mastered fundamental skills. The absence of such third-party assessments could increase the likelihood of grade inflation and present conflicts of interest for teachers responsible for both supporting and evaluating their students. Currently, approximately 99% of students meet the MCAS requirements, which serve as a minimum benchmark for academic proficiency rather than a maximum standard.

Opponents argue that removing this graduation requirement is both unnecessary and potentially detrimental to the long-term educational outcomes of students across the state. Massachusetts, known for its historically high education standards, may risk diminishing its standing as an educational leader if the referendum is approved.

Source: Forbes.

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