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ERIC Number: ED231051
Record Type: RIE
Publication Date: 1982-Oct
Pages: 30
Abstractor: N/A
Reference Count: 0
Michigan School District Response to a Guaranteed Tax Base: A Time-Series Cross-Sectional Analysis. A Rand Note.
Park, Rolla Edward; Carroll, Stephen J.
This study analyzes the effectiveness of a "guaranteed tax base" (GTB) as a reform measure designed to reduce the traditional heavy reliance of school financing on local property tax revenues and to help equalize per pupil expenditures across districts. Such measures call for matching locally raised tax dollars with state aid and consequently lowering the price of expenditures to some school districts. Previous studies by Feldstein (1975) and Ladd (1975) estimate school district expenditure equations using cross-sectional data from Massachusetts. Their results indicate a fairly large price effect on expenditures. The author's study of the price effect over a 5-year period of a GTB currently in place in Michigan rejects this approach as inadequate apart from an analysis of variables over time. Variables considered in the Michigan study include the price effect of the GTB on school districts, representative households, and state and federal aid. Results of a pooling of data for all years for all 451 school districts studied indicate that the effect of the GTB plan on expenditures in Michigan has been so small as to be of no policy significance. These results run counter to the earlier findings of Feldstein and Ladd and suggest that their results should perhaps be rejected. (JBM)
Publications, Rand Corporation, 1700 Main Street, Santa Monica, CA 90406 ($4.00).
Publication Type: Opinion Papers; Reports - Research
Education Level: N/A
Audience: N/A
Language: English
Sponsor: Department of Health and Human Services, Washington, DC.
Authoring Institution: Rand Corp., Santa Monica, CA.
Identifiers: Guaranteed Tax Base Plan; Michigan