We consider issues of equality and efficiency in two different school funding systems--a state-level system in Michigan and a foundation system in Ohio. Unlike Ohio, the Michigan system restricts districts from generating property or income tax revenue to fund operating expenditures. In both states, districts fund capital expenditures with local…

I investigate a possible unintended consequence of Proposition 2½ override behavior--that it led to increased segregation in school districts in Massachusetts. This can occur because richer, low-minority towns tend to have more successful override votes that attract similar households with relatively high demands for public services who can afford…

New York's School Tax Relief Program, STAR, provides state-funded property tax relief for homeowners. Like a matching grant, STAR changes the price of education, thereby altering the incentives of voters and school officials and leading to unintended consequences. Using data for New York State school districts before and after STAR was…

The Great Recession led to marked declines in state revenue. In this paper we investigate whether (and how) local school districts modified their funding and taxing decisions in response to state aid declines in the post-recession period. Our results reveal school districts responded to state aid cuts in the post-recession period by countering…

This paper examines voluntary contributions to public education via charitable school foundations, booster clubs, parent teacher associations, and parent teacher organizations. We use panel data on school-supporting charities with national coverage from 1995 to 2010, which we geocode and match to school districts. We document the meteoric rise of…

Michigan radically altered its school finance system in 1994. The new plan, called Proposal A, significantly increased state aid to the lowest-spending school districts and limited future increases in spending in the highest-spending ones, abolishing local discretion over school spending. I investigate the impact of Proposal A on the distribution…

Increased spending and decreased student performance have been attributed in part to teachers' unions and to the collective bargaining agreements (CBAs) they negotiate with school boards. However, only recently have researchers begun to examine impacts of specific aspects of CBAs on student and district outcomes. This article uses a unique measure…

This article reports the results of school budget simulations with 568 randomly selected California public school teachers, principals, and superintendents. Simulation participants were presented with the budget for a hypothetical school and asked to use that budget to employ the resources that would maximize the academic achievement of the…

An underlying premise of many resource adequacy studies is that reaching a specified set of educational outcomes is directly dependent on the level of resources. This article analyzes resource allocation practices among successful schools, low-performing schools, and average public schools in California. We find that differences in traditional…

Many states have used professional judgment panels to determine the resources schools need to meet certain performance targets. This study initiates a critical study of that method. Using budget simulations with hypothetical schools, we collected the judgments of forty-five principals about how school budgets should be allocated and how school…

This article examines the interaction between school accountability and local control over revenue raising and resource allocation. In particular, it asks whether accountability policies are more or less effective at improving student outcomes in states with stronger local control. Local control is operationalized with multiple measures, including…

Of thirty-eight states with lotteries, sixteen earmark lottery profits for primary and secondary education. In this article, we use a panel data set of states with lotteries to examine the impact of earmarking lottery revenues on state educational spending. We can reject the hypothesis that spending increases dollar for dollar with earmarked…

In 1996, New York State began requiring all graduating high school students (starting with the Class of 1999) to pass rigorous end-of-course exams in five subjects. This study explores whether high school resources have been reallocated in the wake of these new standards and whether reallocation patterns differ among high- and low-graduation-rate…

This article contends that a new concept of education finance has emerged in response to substantial alterations in the U.S. education policy environment. The major distinction between modern and old is that the latter was principally concerned with arrangements of inputs in K-12 schooling. The former, modern-era education finance, is concerned…

This article estimates the dollar amount of public higher education subsidies received by U.S. youth and examines the distribution of subsidies and the taxes that finance them across parental and student income levels. Although youths from high-income families obtain more benefit from higher education subsidies, high-income households pay…