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Finance

Kenneth A. Shores, Christopher A. Candelaria, Sarah E. Kabourek.

Sixty-seven school finance reforms (SFRs) in 26 states have taken place since 1990; however, there is little empirical evidence on the heterogeneity of SFR effects. We provide a comprehensive description of how individual reforms affected resource allocation to low- and high-income districts within states, including both financial and non-financial outcomes. After summarizing the heterogeneity of individual SFR impacts, we then examine its correlates, identifying both policy and legislative/political factors. Taken together, this research aims to provide a rich description of variation in states’ responses to SFRs, as well as explanation of this heterogeneity as it relates to contextual factors.

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Eric Brunner, Joshua Hyman, Andrew Ju.

School finance reforms caused some of the most dramatic increases in intergovernmental aid from states to local governments in U.S. history. We examine whether teachers’ unions affected the fraction of reform-induced state aid that passed through to local spending and the allocation of these funds. Districts with strong teachers’ unions increased spending nearly dollar-for-dollar with state aid, and spent the funds primarily on teacher compensation. Districts with weak unions used aid primarily for property tax relief, and spent remaining funds on hiring new teachers. The greater expenditure increases in strong union districts led to larger increases in student achievement.

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