Evaluating the Recession’s Impact on Equity in State School Finance Systems

• In Event: Equity, School Finance, and Educational Reform

Abstract

The Recession’s effect on school finance systems was unlike previous downturns, with a greater loss of taxable income, a leveling of growth of taxable property wealth, but also substantive infusion of federal stabilization aid to fill holes in state aid formulas. Using school district level panel data from 1995 to 2011, we evaluate descriptively the interplay between local, state and federal source revenues through the course of the recent recession by comparison with the less severe economic downturn of the early 2000s. Next, we estimate whether changes in the distribution of state, local or federal revenue contribute most to changes in overall equity of current spending and whether those contributions changed during the recent recession.

Author

• Bruce D. Baker, Rutgers University