Show Me the Money… and the Student Academic Outcomes? Examining the Logic Underlying K-12 Fiscal Accountability in California (Poster 22)

• In Event: Promising Scholarship in Education Research: Dissertation Fellows and Their Research

Abstract

Beginning in the late 1980s, states began adopting K-12 fiscal accountability policies to monitor school district finances and intervene during episodes of fiscal distress. The argument espoused by policymakers is that a state can improve student academic performance by stabilizing a district’s finances and ensuring that revenues are spent efficiently. This paper provides novel evidence on the relationship between fiscal accountability and academic performance, focusing on California’s K-12 Fiscal Accountability system. California’s accountability system (AB 1200) attaches discrete labels to school districts to identify the level of distress and the intensity of state intervention. Exploiting variation in labels within districts, my results show that severe fiscal stress labels are associated with statistically significant declines in student performance in both reading and math, especially among economically disadvantaged students. To examine the underlying mechanism, I establish that fiscal stress labels are associated with cuts to per pupil expenditures, mainly in instruction, pupil support services, and capital outlays. Budget cuts and the decline in test scores for economically disadvantaged students suggest that state intervention could pressure districts to cut funds that support its most disadvantaged students. This may require that California rethink how they determine fiscal distress and intervene in school district finances.

Author

• Christopher Saldaña, University of Wisconsin - Madison