Carolyn Abott

Targeted school funding is a potentially valuable policy lever to increase educational equality by race, ethnicity, and income, but it remains unclear how to target funds most effectively. We use a regression discontinuity approach to compare districts that narrowly passed or failed a school funding election. We use close tax elections in 9 states to identify effects of operating funds and close bond elections in 8 states to identify effects of capital funds. Results indicate positive achievement returns to spending, especially for math achievement and for operating funds. We find similar returns to spending by race, ethnicity, and income (not statistically different), but we find significantly larger returns for students in low-resource districts than in high-resource districts, including larger returns for Black, Latinx, and low-income students. Mediation analyses suggest spending on teacher salaries and counselors may be particularly effective mechanisms to increase achievement among Black and low-income students.

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We use close tax elections to estimate the impact of school district funding increases on operational spending and student outcomes across seven states. Districts with passing levies directed new revenue toward support services and instructor salaries but did not increase teacher staffing levels. These districts eventually realized gains in student achievement and attainment. Our preferred estimates imply that increasing operational spending by $1,000 per pupil increased test scores by approximately 0.15 of a standard deviation and graduation rates by approximately 9 percentage points. There is some evidence of diminishing returns, as these effects are driven by districts below the median in spending per pupil. Based on research linking academic outcomes to earnings, we conclude that these spending increases were likely cost-effective.

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