The “Side Effects” of K-12 Fiscal Accountability Policy

• In Event: Constructing New Visions in K-12 School Finance: The Past, Present, and Future of State Interventions into District Finances

Abstract

Educational research has historically focused on proving "what works" while largely ignoring the potential adverse effects of interventions—a stark contrast to medical research, which systematically studies both effects and side effects. This study addresses this critical gap by examining the unintended consequences of California's AB 1200 fiscal accountability system, building on recent research that documented how fiscal intervention promoted austerity rather than genuine accountability during the 2008 financial crisis (Saldaña, 2024).

Motivated by Zhao's (2017) framework for studying “side effects” in education and grounded in critical policy analysis, this research investigates three key domains of potentially (un)intended consequences arising from fiscal accountability policies: segregation, discipline practices, and educational marketization. Importantly, these "side effects" are understood within the broader context of historical injustice and policy design that has systematically maintained racial and power hierarchies through disinvestment and austerity in schools serving communities of color and racially minoritized students.

The theoretical framework conceptualizes fiscal accountability as promoting austerity—budget cuts without consideration for educational quality—rather than genuine accountability that balances fiscal health with student outcomes (Saldaña, 2024). This approach reflects broader patterns of systemic disinvestment that disproportionately target districts serving racially minoritized communities.

Using longitudinal data from California school districts between 2009-2019, this study employs difference-in-differences methodology to examine changes in segregation indices, disciplinary practices, and charter school enrollment in districts subject to fiscal intervention compared to those that were not. The analysis specifically attends to how these effects vary by district racial composition and wealth, interrogating differential impacts that reflect broader patterns of structural racism.

This research contributes to educational policy by demonstrating how seemingly neutral fiscal policies reproduce and amplify racial inequalities through multiple mechanisms. By revealing how fiscal accountability policies systematically disadvantage districts serving communities of color, the study provides crucial evidence for understanding policy as a tool of racial control rather than merely technical governance. The findings have significant implications for designing fair oversight systems that disrupt rather than reinforce historical patterns of educational inequity, potentially informing transformative reforms that center racial justice alongside fiscal responsibility.

Authors

• Christopher Saldaña, University of Wisconsin - Madison

• Laura Davalos, Wisconsin Center for Education Research