ERIC Number: EJ1045248
Record Type: Journal
Publication Date: 2014
Abstractor: As Provided
Reference Count: N/A
Did Cuts in State Aid during the Great Recession Lead to Changes in Local Property Taxes?
Chakrabarti, Rajashri; Livingston, Max; Roy, Joydeep
Education Finance and Policy, v9 n4 p383-416 Fall 2014
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 these cuts. Relative to the pre-recession period, a unit decrease in state aid was associated with a relative increase in local funding. To further probe the school district role, we explore whether the property tax rate, which reflects decisions of districts facing budgetary needs, responded to state aid cuts. We find, relative to the pre-recession period, the post-recession period was characterized by a strong negative relationship between property tax rate and state aid per pupil. We also find important heterogeneities in these responses by region, property wealth, and importance of School Tax Relief Program revenue in district budgets.
Descriptors: State Aid, Educational Finance, School Districts, Financial Support, Taxes, Economic Climate, Budgeting, Resource Allocation, Expenditure per Student, Geographic Location
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Publication Type: Journal Articles; Reports - Research
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