The effects of competition from public charter schools on district school budget decisions are theoretically ambiguous. Competitive pressures could increase desired budget autonomy since they give district school leaders more flexibility; however, competition could decrease desired budget autonomy if district school leaders are generally risk-averse or if they believe that central office staff are in better positions to make school-level budget decisions. Competitive pressures could also increase or decrease changes in school-level spending depending on school leaders’ beliefs about how to efficiently allocate resources.
We randomly assign surveys to district school leaders in Texas in the 2019-20 school year to determine the effects of anticipated competition from public charter schools on reported desire for budget autonomy and expectations about future school-level spending decisions. We find the first experimental evidence to suggest that anticipated charter school competition has large negative effects on school leaders’ reported spending on certain categories of support staff, and reduces, or has no effect on, the reported desire for more school-level budget autonomy. The negative effects on spending for support staff tend to be larger for school leaders with more experience.