Calculation of Annual Change in the Privatization Threshold Amount

(1) Pursuant to M.G.L. c. 7, § 53, as of January 1st each year, Privatization Threshold Amount shall increase from the Original Threshold Amount and any changes in prior year Privatization Threshold Amounts to reflect increases in the consumer price index calculated by the United States Bureau of Labor Statistics for all urban consumers nationally during the most recent 12 month period for which data is available. st (2) As of January 1 of each year, the most recent 12 month period for which data is available is the previous December through November period. For example, on January 1, 2012, the most recent 12 month period for which United States Bureau of Labor Statistics data was available was the period from December 1, 2010 to November 30, 2011. (3) In January of each year, the Department shall calculate the CPI for the Most Current Year by adding up the monthly change in the CPI from the most recent December through November period and dividing by 12. For example, in the period from December 1, 2010 to November 30, 2011, the average CPI was 224.385. (4) Following the calculation of the CPI for the Current Year, the Department shall subtract the CPI for the Previous Year from the CPI for the Current Year to determine the CPI Change. For example, the CPI for Previous Year in the example in 965 CMR 4.03(3), for the period from December 1, 2009 to November 30, 2010, was 217.828. In this example, the CPI Change for the Privatization Threshold Amount to take effect as of January 1, 2012 was 6.56. (5) In order to determine the Percent Change in CPI, the Department shall divide the CPI Change by the CPI for Previous Year, and multiply the result by 100. For example, in the example 965 CMR 4.03(4), dividing the CPI Change – 6.56 – by the CPI-PY – 217.828 – yields the number 0.0301, which, multiplied by 100, yields a Percent Change in CPI of 3.01%. (6) To determine the Privatization Threshold Change, the Department shall multiply the prior year’s Privatization Threshold Amount by the Percent Change in CPI. In the example 965 CMR 4.03(5), for instance, because the prior year’s Privatization Threshold Amount was $508,775 and the Percent Change in CPI was 3.01%, the Privatization Threshold Change was $15,316. (7) To determine the Current Privatization Threshold Amount, the Department shall add the Privatization Threshold Change to the prior year’s Privatization Threshold Amount. In the instance in 965 CMR 4.03(6), adding the Privatization Threshold Change -- $15,316 – to the prior year’s Privatization Threshold Amount -- $508,775 – yielded a Current Privatization Threshold Amount, as of January 1, 2012, of $524,091. (8) In the event that the CPI declines, the new Privatization Threshold Amount shall decline as well, but in no event shall the new Privatization Threshold decline below the statutorily set threshold of $500,000.