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Paying for School Finance Reforms: How States Raise Revenues to Fund Increases in Elementary-Secondary Education Expenditures

This study investigates how individual states raise revenue to pay for elementary-secondary education spending following school finance reforms (SFRs). We identify states that increased and sustained education expenditures after reform, search for legislative statutes that appropriated more education spending, and assess how policymakers funded the SFRs. Our results show that state legislatures increase investments in education by increasing tax revenue streams, such as sales and excise taxes, and by taking over property tax collections. Considering these results, we discuss that increased state investment in education should be accompanied by a policy mechanism to distribute state aid equitably to districts. Moreover, policymakers should consider local voters’ preferences when implementing SFR policies, as tax increases may reduce local fiscal effort for education.

Keywords
education finance, state aid, school finance reforms
Education level
Topics
Document Object Identifier (DOI)
10.26300/vg4y-ga67

EdWorkingPaper suggested citation:

McNeill, Shelby M., and Christopher A. Candelaria. (). Paying for School Finance Reforms: How States Raise Revenues to Fund Increases in Elementary-Secondary Education Expenditures. (EdWorkingPaper: 24-892). Retrieved from Annenberg Institute at Brown University: https://doi.org/10.26300/vg4y-ga67

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This EdWorkingPaper is published in:

McNeill, S.M., & Candelaria, C.A. (2024). Paying for School Finance Reforms: How States Raise Revenues to Fund Increases in Elementary-Secondary Education Expenditures. American Educational Research Journal. https://doi.org/10.3102/00028312241264320